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rce at the retail outlets. The specialty shops essentially serve as your client’s sales force.The above analysis offers an explanation of what has affected the top side of the profitability problem. Still to be examined is the cost, or bottom side, of the profitability issue. Questions to uncover cost issues would include:q How does the client account for its costs?The client has a single manufacturing and assembly plant. They have separate lines in this facility to produce racing, mainstream and children’s products. They divide their costs into the following categories: labor, material and overhead. Overall costs have been increasing at a fairly hefty rate of 10% per year.q What is the current breakdown of costs along these categories for each product segment?Racing: Labor = 30%, Material = 40%, Overhead = 30%Mainstream: Labor = 25%, Material = 40%, Overhead = 35%Children’s: Labor = 25%, Material = 40%, Overhead = 35%q How has this mix of expenses changed over the past five years?In all segments, labor is an increasing percentage of the costs. q Does the basic approach to manufacturing (. the mix of labor and technology) reflect that of its petition?Your client tells you that there is a continuing movement to automate and utilize technology to improve efficiency throughout the industry, but it is his/her opinion that their approach, maintaining the “human touch”, is what differentiates them from the petition. (Unfortunately, he’s right!!)q Is the workforce unionized?Yesq What is the average age of the workforce?52 and climbing. There is very little turnover in the workforce.q What is the present throughput rating? How has it changed over the past five years?Presently the plant is producing at about 80% of capacity. This has been decreasing steadily over the last several years.q What is the typical reason for equipment shutdown?Emergency repairq Describe the preventive maintenance program in effect at the client’s facility?Preventive maintenance is performed informally based on the knowledge of senior technicians.q How often has equipment been replaced? Is this consistent with the original equ