Memorial Corporation makes a$$ special$-$purpose D$4$H machine used in the textile industry. Memorial has designed the D$4$H machine for $2021$ to be distinct from its competitors. It has been generally regarded as a superior machine. Memorial presents the following data for the years $2021$ and $2022.$

$2021$

$2022$

$1.$

Units of D$4$H produced and sold

$200$

$220$

$2.$

Selling price

$$44,000$

$$46,000$

$3.$

Direct materials $($kilograms$)$

$280,000$

$287,500$

$4.$

Direct material cost per kilogram

$$7\mathrm{.}75$

$$8\mathrm{.}25$

$5.$

Manufacturing capacity $($units of D$4$H$)$

$275$

$275$

$6.$

Total conversion costs

$$2,145,000$

$$2,172,500$

$7.$

Conversion cost per unit of capacity

$$7,800$

$$7,900$

$8.$

Selling and customer$-$service capacity

$100$ customers

$95$ customers

$9.$

Total selling and customer$-$service costs

$$1,100,000$

$$950,000$

$10.$

Selling and customer$-$service capacity cost per customer

$$11,000$

$$10,000$

$11.$

Design staff

$11$

$11$

$12.$

Total design costs

$$1,155,000$

$$1,160,500$

$13.$

Design cost per employee

$$105,000$

$$105,500$ Memorial produces no defective$$ machines, but it wants to reduce direct materials usage per D$4$H machine in $2022.$ Manufacturing conversion costs in each year depend on production capacity defined in terms of D$4$H units that can be$$ produced, not the actual units of D$4$H produced. Selling and$$ customer$-$service costs depend on the number of customers that Memorial can$$ support, not the actual number of customers Memorial serves. Memorial has $80$ customers in $2021$ and $85$ customers in $2022.$ At the start of each$$ year, management uses its discretion to determine the number of design staff for the year. The design staff and its costs have no direct relationship with the quantity of D$4$H produced or the number of customers to whom D$4$H is sold. $1.$

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 $2022$ based on $2022$ production. If you could not calculate the amount and cost of unused$$ capacity, indicate why not.

$2.$

Suppose Memorial can add or reduce its manufacturing capacity in increments of $35$ units. What is the maximum amount of costs that Memorial could save by downsizing manufacturing$$ capacity?

$3.$

Memorial$,$ in$$ fact, does not eliminate any of its unused manufacturing capacity. Why might Memorial not$$ downsize? Requirement $1.$ 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 $2022$ based on $2022$ production. If you could not calculate the amount and cost of unused$$ capacity, indicate why not.

Begin by calculating the amount of unused capacity for each department.$$ Then, calculate the cost. $($If it is not possible to calculate the amount or cost of unused$$ capacity, leave the input cells$$ blank.$)$

Amount of

Cost of

unused capacity

unused capacity

$($a$)$

Manufacturing

$($b$)$

Selling and customer service

$($c$)$

Design