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Author Question: Following a strategy of product differentiation, Izzy's Limited Company makes a high-end Appliance, ... (Read 123 times)

ericka1

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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 sold58,00060,200
Selling price$500$570
Direct materials (square feet)158,000161,750
Direct materials costs per square foot$51$57
Manufacturing capacity in units of XT1562,90062,900
Total conversion costs$6,290,000$6,856,100
Conversion costs per unit of capacity$100$109
Selling and customer-service capacity (customers)150150
Total selling and customer-service costs$2,295,000$2,396,250
Selling and customer-service capacity cost per customer$15,300$15,975

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 140 customers in 2017 and 145 customers in 2018.

What is operating income in 2018?
◦ $7,463,500
◦ $15,841,900
◦ $9,212,000
◦ $15,921,775
Horngren's Cost Accounting: A Managerial Emphasis ¦ Datar, Rajan ¦ 16th Edition
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Marked as best answer by ericka1 on Mar 6, 2021

kkenney

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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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ericka1

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Reply 2 on: Mar 6, 2021
Excellent

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