50.1K

Verified Solution

Link Copied!

CoursHeroTranscribedText: tompton 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, Compton must deliver quality services at a low cost. Compton presents the following data for 2016 and 2017. 2016 2017 Number ofjobs billed 40 50 Selling price perjob $32,000 $30,000 Architect labor-hou rs 24,000 27,000 Cost per architect labor hour $35 $36 Architect support capacity (number of jobs the rm can do) 60 60 Total cost of softwa re-implementation support $168,000 $180,000 Software-implementation support-capacity cost perjob (row 6/row5) $2,800 $3,000 Architect labor-hours costs are variable costs. Architect support cost for each year depend on the Architect support capacity that Compton chooses to maintain each year. (That is, the number of jobs it can do each year.) architect support costs do not vary with the actual number of jobs done that year. 1. Calculate the amount and cost of unused architectural support capacity at the beginning of 2017, based on the number of jobs actually done in 2017. Amount Cost of unused architectural support capacity 2. Suppose Compton can add or reduce its architectural support capacity in increments of 10 units. What is the maximum amount of costs that Compton could save in 2017 by downsizing architectural support capacity? 5 3. Compton, in fact, does not eliminate any of its unused architectural support capacity. Why might Compton not downsize

Answer & Explanation Solved by verified expert

See Answer