Solside Corporation is a small information systems consulting firm that specializes in helping companies implement sales management software. The market for Solside$\text{'}$s products is very competitive. To$$ compete, Solside must deliver quality service at a low cost. Solside bills clients in terms of units of work$$ performed, which depends on the size and complexity of the sales management system. Solside presents the following data for the years $2021$ and $2022.$

$2021$

$2022$

$1.$

Units of work performed

$70$

$85$

$2.$

Selling price

$$54,000$

$$53,000$

$3.$

Software implementation labour$-$hours

$30,500$

$33,000$

$4.$

Cost per software implementation labour$-$hour

$$63$

$$66$

$5.$

Software implementation support capacity $($units of work$)$

$105$

$105$

$6.$

Total cost of software implementation support

$$462,000$

$$472,500$

$7.$

Software implementation support capacity cost per unit of work

$$4,400$

$$4,500$

$8.$

Number of employees doing software development

$3$

$3$

$9.$

Total software development costs

$$390,000$

$$399,000$

$10.$

Software development cost per employee

$$130,000$

$$133,000$

Software implementation$$ labour$-$hour costs are variable costs. Software implementation support costs for each year depend on the software implementation support capacity$($defined in terms of units of$$ work$)$ that Solside chooses to maintain each year. They do not vary with the actual units of work performed each year. At the start of each$$ year, management uses its discretion to determine the number of$$ software$-$development employees. The$$ software$-$development staff and costs have no direct relationship with the number of units of work performed $1.$

Where$$ possible, calculate the amount and cost of unused capacity for$($a$)$ software implementation support and$($b$)$ software development at the beginning of $2022,$ based on units of work to be performed in $2022.$ If you could not calculate the amount and cost of unused$$ capacity, indicate why not.

$2.$

Suppose Solside can add or reduce its software implementation support capacity in increments of $5$ units. What is the maximum amount of costs that Solside could save by downsizing software implementation support$$ capacity?

$3.$

Solside$,$ in$$ fact, does not eliminate any of its unused software implementation support capacity. Why might Solside not$$ downsize? Requirement $1.$ Where$$ possible, calculate the amount and cost of unused capacity for$($a$)$ software implementation support and$($b$)$ software development at the beginning of $2022,$ based on units of work to be performed in $2022.$ If you could not calculate the amount and cost of unused$$ 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$)$

Software implementation support

$($b$)$

Software development

Part $2$

If you are unable to calculate the amount and cost of unused$$ capacity, indicate why.

We are unable to calculate the amount and cost of unused capacity for

$$

both departments

software development

software implementation support

due to the

$$

actual units being less than capacity.

actual units being greater than capacity.

lack of budgeted costs for the department.

lack of cause$-$and$-$effect relationship.

Part $3$

Requirement $2.$ Suppose Solside can add or reduce its software implementation support capacity in increments of $5$ units. What is the maximum amount of costs that Solside could save by downsizing software implementation support$$ capacity?

Begin by selecting the formula you will use.$$ Then, enter the amounts and calculate the maximum cost the company can save. $($Enter an amount for each input cell including$$ zeros.$)$

Part $4$

Number of units reduced

x

Conversion cost per capacity

$=$

Maximum costs saved by downsizing

x

$=$

Part $5$

Requirement $3.$ Solside$,$ in$$ fact, does not eliminate any of its unused software implementation support capacity. Why might Solside not$$ downsize?

Select the three statements that would explain why Solside might not downsize.

A$.$

Solside may have decided not to downsize because downsizing requires a significant reduction in capacity. For$$ example, Solside may have chosen to downsize some more software implementation support capacity if it could do so in increments of$$ say, $2,$ rather than $5$ units.

B$.$

Solside may choose not to downsize because it projects sales increases that would lead to a greater demand for and utilization of capacity.

C$.$

Solside may have decided not to downsize to boost employee morale and keep employees more motivated and produ