Identifying and managing unused capacity. Refer to the Meredith Corporation informa¬

tion in Exercise 13-18.

Required 1. Where possible, calculate the amount and cost of unused capacity for

(a) manufacturing,

(b) selling and customer service, and

(c) design at the beginning of 2007 based on 2007 pro¬

duction. Ifyou could not calculate the amount and cost ofunused capacity, indicate why not.

2. Suppose Aleredith can add or reduce its manufacturing capacity in increments of 30 units.

What is the maximum amount of costs that Meredith could save by downsizing manufac¬

turing capacity?

)3- Aleredith, in fact, does not eliminate any ofits unused manufacturing capacity. Why might Meredith not dowmsize?