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Author Question: Following a strategy of product differentiation, Izzy's Limited Company makes a high-end Appliance, ... (Read 45 times)

bclement10

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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 sold59,00062,500
Selling price$600$650
Direct materials (square feet)152,000155,500
Direct materials costs per square foot$60$68
Manufacturing capacity in units of XT1562,90062,900
Total conversion costs$6,290,000$6,730,300
Conversion costs per unit of capacity$100$107
Selling and customer-service capacity (customers)170170
Total selling and customer-service costs$2,567,000$2,669,000
Selling and customer-service capacity cost per customer$15,100$15,700

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 160 customers in 2017 and 165 customers in 2018.

What is the net effect on operating income as a result of the price-recovery component? (Round any intermediary calculations to two decimals and your final answer to the nearest dollar.)
◦ $1,292,700 F
◦ $1,545,000 U
◦ $1,292,700 U
◦ $1,545,000 F
Horngren's Cost Accounting: A Managerial Emphasis ¦ Datar, Rajan ¦ 16th Edition
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Marked as best answer by bclement10 on Mar 6, 2021

alvinum

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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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bclement10

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Reply 2 on: Mar 6, 2021
YES! Correct, THANKS for helping me on my review

alexanderhamilton

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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