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Author Question: Following a strategy of product differentiation, Izzy's Limited Company makes a high-end Appliance, ... (Read 79 times)

vicotolentino

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on: Mar 6, 2021
Following a strategy of product differentiation, Izzy's Limited Company makes a high-end Appliance, XT15. Izzy's Limited presents the following data for the years 2017 and 2018:

20172018
Units of XT15 produced and sold55,00058,500
Selling price$400$440
Direct materials (square feet)150,000153,300
Direct materials costs per square foot$51$55
Manufacturing capacity in units of XT1562,70062,700
Total conversion costs$6,270,000$6,708,900
Conversion costs per unit of capacity$100$107
Selling and customer-service capacity (customers)150150
Total selling and customer-service costs$2,325,000$2,426,250
Selling and customer-service capacity cost per customer$15,500$16,175

Izzy's Limited produces no defective units but it wants to reduce direct materials usage per unit of XT15. Manufacturing conversion costs in each year depend on production capacity defined in terms of XT15 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. Izzy's Limited had 135 customers in 2017 and 140 customers in 2018.

What is the change in operating income from 2017 to 2018?
◦ $2,418,350 U
◦ $3,740,000 F
◦ $2,418,350  F
◦ $3,740,000 U
Horngren's Cost Accounting: A Managerial Emphasis ¦ Datar, Rajan ¦ 16th Edition
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Marked as best answer by vicotolentino on Mar 6, 2021

SamMuagrove

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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.
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vicotolentino

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Reply 2 on: Mar 6, 2021
Excellent

xthemafja

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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