Refer to Exercise 13-29.

Data From Exercise 13-29

Krater Associates is an architectural firm that has been in practice only a few years. Because it is a relatively new firm, the market for the firm’s services is very competitive. To compete successfully, Krater must deliver quality services at a low cost. Krater presents the following data for 2019 and 2020.

Required

1. Calculate the amount and cost of unused architectural support capacity at the beginning of 2020, based on the number of jobs actually done in 2020.
2. Suppose Krater can add or reduce its architectural support capacity in increments of 15 units. What is the maximum amount of costs that Krater could save in 2020 by downsizing architectural support capacity?
3. Krater, in fact, does not eliminate any of its unused architectural support capacity. Why might Krater not downsize?

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1. Number of jobs billed Selling price per job 3. Architect labor-hours 2. 4. Cost per architect labor-hour 5. Architect support capacity (number of jobs the firm can do) 6. Total cost of software-implementation support 7. Software-implementation support-capacity cost per job 2019 44 $36,000 19,000 $38 61 $164,700 $2,700 2020 46 $35,000 30,000 $39 61 $176,900 $2,900