This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Following a strategy of product differentiation, Somerset Corporation makes a high-end computer ... (Read 39 times)

nummyann

  • Hero Member
  • *****
  • Posts: 576
on: Mar 6, 2021
Following a strategy of product differentiation, Somerset Corporation makes a high-end computer monitor, CM7. Somerset Corporation presents the following data for the years 2017 and 2018: 

20172018
Units of CM7 produced and sold5,0005,500
Selling price$400$440
Direct materials (pounds)15,00015,375
Direct materials costs per pound$40$44
Manufacturing capacity for CM12 (units)10,00010,000
Conversion costs$1,000,000$1,100,000
Conversion costs per unit of capacity$100$110
Selling and customer-service capacity (customers)6058
Total selling and customer-service costs$360,000$362,500
Selling and customer-service capacity cost per customer$6,000$6,250

Somerset Corporation produces no defective units but it wants to reduce direct materials usage per unit of CM7 in 2017. Manufacturing conversion costs in each year depend on production capacity defined in terms of CM7 units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Ernsting Corporation has 100 customers in 2017 and 115 customers in 2018. The industry market size for high-end computer monitors increased 5% from 2017 to 2018. 

Required: 
a.What is the revenue effect of the price-recovery component?
b.What is the cost effect of the price-recovery component?
c.What is the net effect on operating income as a result of the price-recovery component?
d.What is the net effect on operating income as a result of the productivity component? 
Horngren's Cost Accounting: A Managerial Emphasis ¦ Datar, Rajan ¦ 16th Edition
Buy Test-Bank


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by nummyann on Mar 6, 2021

wuly

  • Sr. Member
  • ****
  • Posts: 327
Reply #1 on: Mar 6, 2021
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
Answer Preview
Only 49% of students answer this correctly


nummyann

  • Member
  • Posts: 576
Reply 2 on: Mar 6, 2021
Great answer, keep it coming :)

pratush dev

  • Member
  • Posts: 321
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

« previous next »
 

Did you know?

Many supplement containers do not even contain what their labels say. There are many documented reports of products containing much less, or more, that what is listed on their labels. They may also contain undisclosed prescription drugs and even contaminants.

Did you know?

Though Candida and Aspergillus species are the most common fungal pathogens causing invasive fungal disease in the immunocompromised, infections due to previously uncommon hyaline and dematiaceous filamentous fungi are occurring more often today. Rare fungal infections, once accurately diagnosed, may require surgical debridement, immunotherapy, and newer antifungals used singly or in combination with older antifungals, on a case-by-case basis.

Did you know?

During the twentieth century, a variant of the metric system was used in Russia and France in which the base unit of mass was the tonne. Instead of kilograms, this system used millitonnes (mt).

Did you know?

Cytomegalovirus affects nearly the same amount of newborns every year as Down syndrome.

Did you know?

According to research, pregnant women tend to eat more if carrying a baby boy. Male fetuses may secrete a chemical that stimulates their mothers to step up her energy intake.

El Niño and areas of high marine primary production around the Galapagos Islands. Noti El Niño and areas of high marine primary production around the Galapagos Islands. Noti
What makes tea so good What makes tea so good
"Practice makes perfect" "Practice makes perfect"
Using a bright light makes seeing where the smoke is coming from easier. In this case, smoke was ... Using a bright light makes seeing where the smoke is coming from easier. In this case, smoke was ...
High school science classes are required to use deductive logic High school science classes are required to use deductive logic
A simple pendulum of length 2.5 m m makes 5.0 complete swings in 16 s s . What is the ... A simple pendulum of length 2.5 m m makes 5.0 complete swings in 16 s s . What is the ...
Video: Cellular Respiration & Glucose Mobilization (Glucose transport & Phosphorylation of Glucose)

For a complete list of videos, visit our video library