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 50 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
:D TYSM

miss_1456@hotmail.com

  • Member
  • Posts: 289
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

A recent study has found that following a diet rich in berries may slow down the aging process of the brain. This diet apparently helps to keep dopamine levels much higher than are seen in normal individuals who do not eat berries as a regular part of their diet as they enter their later years.

Did you know?

As many as 20% of Americans have been infected by the fungus known as Histoplasmosis. While most people are asymptomatic or only have slight symptoms, infection can progress to a rapid and potentially fatal superinfection.

Did you know?

About 3% of all pregnant women will give birth to twins, which is an increase in rate of nearly 60% since the early 1980s.

Did you know?

Alzheimer's disease affects only about 10% of people older than 65 years of age. Most forms of decreased mental function and dementia are caused by disuse (letting the mind get lazy).

Did you know?

Disorders that may affect pharmacodynamics include genetic mutations, malnutrition, thyrotoxicosis, myasthenia gravis, Parkinson's disease, and certain forms of insulin-resistant diabetes mellitus.

Frequently Used Computer Terms Frequently Used Computer Terms
Who Makes The Decisions at Home? Who Makes The Decisions at Home?
The initial timing is where the spark plug fires at idle speed. The computer then advances the ... The initial timing is where the spark plug fires at idle speed. The computer then advances the ...
Most stepper motors use four wires, which are pulsed by the computer to rotate the armature in ... Most stepper motors use four wires, which are pulsed by the computer to rotate the armature in ...
The following information relates to the Cutting Department of Kittina Corporation for the ... The following information relates to the Cutting Department of Kittina Corporation for the ...
Students pointing at a computer screen Students pointing at a computer screen
Video: Ionic bonds - role of ions in the body

For a complete list of videos, visit our video library