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The XTown manufactures an entry - level hoverboard, HOV - X . Pursuing a cost - leadership strategy, the company has tried to improve quality
The XTown manufactures an entrylevel hoverboard, HOVX Pursuing a costleadership 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 while rework and unit costs of the HOVX have decreased. XTown has reduced manufacturing capacity because capacity is no longer needed to support rework. XTown has also lowered HOVXs selling price to gain market share and unit sales have increased.
Information about the current period and last period follows:
Requirements
Calculate the amount and cost of a unused manufacturing capacity and b unused selling and customerservice capacity at the beginning of based on actual production and actual number of customers served in
Suppose Town can add or reduce its selling and customerservice capacity in increments of customers. What is the maximum amount of costs that XTown could save in by downsizing selling and customerservice capacity?
XTown, in fact, does not eliminate any of its unused selling and customerservice capacity. Why might XTown not downsize?
Requirement Calculate the amount and cost of a unused manufacturing capacity and b unused selling and customerservice
First, calculate the amount and cost of a unused manufacturing capacity.
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