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Author Question: Trusted Products Company makes a household appliance with model number L800. The goal for 2018 is to ... (Read 92 times)

j.rubin

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Trusted Products Company makes a household appliance with model number L800. The goal for 2018 is to reduce direct materials usage per unit. No defective units are currently produced. Manufacturing conversion costs depend on production capacity defined in terms of L800 units that can be produced. The industry market size for appliances increased 10% from 2017 to 2018. The following additional data are available for 2017 and 2018:

20172018
Units of L800 produced and sold34,00037,400
Selling price$390$370
Direct materials (square feet)94,00092,500
Direct material costs per square foot$31$32
Manufacturing capacity for L800 (units)42,50040,900
Total conversion costs$1,190,000$1,145,200
Conversion costs per unit of capacity$28$28

What is the cost effect of the growth component for direct materials?
◦ $291,400 U
◦ $1,326,000 F
◦ $1,326,000 U
◦ $291,400 F


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Marked as best answer by j.rubin on Mar 6, 2021

AmberC1996

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j.rubin

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Reply 2 on: Mar 6, 2021
Excellent


kswal303

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

 

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