The XTown manufactures an entry$-$level hoverboard, HOV$-$X$.$ Pursuing a cost$-$leadership strategy, the company has tried to improve quality and reduce costs. As a result of the actions taken over the last year, quality has significantly improved in $2020$ while rework and unit costs of the HOV$-$X have decreased. XTown has reduced manufacturing capacity because capacity is no longer needed to support rework. XTown has also lowered HOV$-$X$\text{'}$s selling price to gain market share and unit sales have increased.

Information about the current period $(2020)$ and last period $(2019)$ follows:

Requirements

Calculate the amount and cost of $($a$)$ unused manufacturing capacity and $($b$)$ unused selling and customer$-$service capacity at the beginning of $2020$ based on actual production and actual number of customers served in $2020.$

Suppose $x$ Town can add or reduce its selling and customer$-$service capacity in increments of $10$ customers. What is the maximum amount of costs that XTown could save in $2020$ by downsizing selling and customer$-$service capacity?

XTown, in fact, does not eliminate any of its unused selling and customer$-$service capacity. Why might XTown not downsize?

Requirement $1.$ Calculate the amount and cost of $($a$)$ unused manufacturing capacity and $($b$)$ unused selling and customer$-$service $2020.$

First, calculate the amount and cost of $($a$)$ unused manufacturing capacity.