Danny Company manufactures an electronic component, ZP98. This component is significantly less expensive than similar products sold by Danny's competitors. Order processing time is very short, however, approximately 10% of products are detective and returned by the customer Returns and refunds are handled promptly Yarmouth Manufacturing, Danny's main competitor, has a higher-priced product with almost no defects but a longer order processing time. Assume that in 2022, Danny has changed its processes and trained workers to recognize quality problems and fix them before products are frished and shipped to customers, Quality is now at an acceptable level. Cost per kilogram of materials is about the same s before, but conversion costs are higher and Danny has raised its selling price in line with the market Sales have increased and retums have decreased Danny's managers attribute this to higher quality and a price that is less tha Yarmouth's information about the cument period (2022) and last period (2021) follows More info - X Conversion costs in each year depend on production capacity defined in terms of 2P98 units that can be produced, not the actual units produced. Selling and customer-service costs depend on the number of customers that Danny can support, not the actual number of customers & serves Danny has 70 customers in 2021 and 60 customers in 2022. At the start of each year, management uses t discretion to determine the number of advertising staff for the year Advertising staff and its costs have no direct relationship with the quantity of ZP98 units produced and sold or the number of customers who buy ZP98 Data table 2021 2022 your answers to the r 1a Units of 2P produced and sold 10 Units of ZP90 tumed 5.900 1225 550 275 5350 6.950 2 Selling price 48 63 3 Direct materials() 3,100 3775 4. Direct material cost program S 11.00 11,00 5 Manufacturing capacity in units of 2P98 7.500 7.500 Total conversion costs $ 120,000 $ 172.500 7. Conversion cost per unt of capacity $ 165 23 8. Selling and customer-service capacity 80 cm 30customers Total selling and customer-service costs $ 4.400 1 4.600 10 Seling and customer-service capacity cost per customer 55.00 $ 57.50 11. Advertising sta 1 12 Total advertising costs $ 22,000 $ 27,500 13. Advertising cost per employ $ 22,000 $ 27.500 Required 1. Calculate the change in operating income of Danny Company in 2021 and 2022 2. Calculate the growth price-recovery, and productivity components that explain the change in operating income from 2021 to 2022 Ad 3. Comment on your answer in requirement 2. What do these components indicate T Opera The ch Print Done X Danty Company manufactures an electronic component, 2P. This component is significantly less expensive than similar products sold by Danny's competitors Order-processing time is very short however, approximately 10% of product delective and returned by the customer. Returns and refunds are handled promptly Yarmouth Manufacturing Danny's main competitor, has a higher priced product with almost no defects but a longer order processing time. Assume that in 2002, Danny has changed its processes and trained workers to recognize quality problems and fix them before products are finished and shipped to customers. Quality is now at an acceptable level. Cost per kilogram of materials is about the same as before, but conversion costs are higher, and Danny has raised its selling price in line with the market Sales have increased and retums have decreased Danny's managers attribute this to higher quality and a price that is still less than Yannou's Information about the current period (2022) and last period (2021) follows More info Conversion costs in each year depend on production capacity defined in terms of ZP98 units that can be produced, not the actual units produced Seling and customer service costs depend on the number of customers that Danny can support, not the actual number of customers it serves. Danny has 70 customers in 2021 and 80 customers in 2022. At the start of each year, management uses its discretion to determine the number of advertising staff for the year. Advertising staff and its costs have no direct relationship with the quantity of 298 units produced and sold or the number of customers who buy Required Data table 2021 2022 your answers to the ta Units of 2P96 produced and sold 5.900 7.225 13 Units of ZP98 560 275 5.350 te Net sales in units 6050 2. Seling price $ 48 S 53 3. Drect materials (kilograms) used 3.100 3775 4 Direct materal cost program S 11.00 11.00 - X 5 Manufacturing capacity in units of ZP96 7.500 7,500 6. Total conversion co $ 120.000 $ 172,500 7. Conversion cost per unit of capacity $ 16.5 23 8. Selling and customer-service capacity 80 customers 80 customers Total sating and customer-service costs $ 4,400 $ 4,000 10 Selling and customer-service capacity cost per customer S 56.00 $ 57.50 11. Advertising sta 1 12 Total advertising costs $ 22,000 $ 27,500 13. Advertising cost per employee $ 22.000 1 27.500 1. Calculate the change in operating income of Danny Company in 2001 and 2022. 2. Calculate the growth, price-recovery, and productivity components that explain the change in operating income from 2001 to 2022 Adv 3. Comment on your answer in requirement 2. What do these components indicate? Opera The ch Print Done Time Remaining: 01:10:33 Next Denny Company manufactures an electronic component, ZP98 This component is significantly less expensive than similar products sold by Danny's competitors. Order processing time is very short, however, approximately 10% of products a defective and returned by the customer Retums and refunds are handled promptly. Yarmouth Manufacturing. Danny's main competitor, has a higher-priced product with almost no defects but a longer order-processing time. Assume that in 2002, Danny has changed its processes and trained workers to recognize quality problems and fix them before products are finished and shipped to customers. Quality is now at an acceptable level. Cost per kilogram of materials is about the same as before, but conversion costs are higher, and Danny has raised its selling price in line with the market. Sales have increased and retums have decreased. Danny's managers attribute this to higher quality and a price that is still less than Data table 1 Units of 2P98 resumed 1c. Net sales in units 2 Selling price More info Conversion costs in each year depend on production capacity defined in terms of ZP98 units that can be produced, not the actual units produced. Seling and customer-service costs depend on the number of customers that Danny can support, not the actual number of customers it serves. Danny has 70 customers in 2021 and 80 customers in 2022. At the start of each year, management uses its discretion to determine the number of advertising staff for the year. Advertising staff and costs have no direct relationship with the quantity of 208 units produced and sold or the number of customers who buy 298 2021 2022 ta Units of 2P98 produced and sold 5.000 7.225 550 275 5,350 0,950 $ 485 53 3 Direct materials (kilograms) used 3,100 3,775 4. Drect material cost per kilogram $ 11.00 $ 11.00 Required Manufacturing capacity in units of 29 7,500 7,500 6. Total conversion costs $ 120,000 $ 172,500 7 Conversion cost per unit of capacity $ Sefing and customer-service capacity 50customers Total saling and customer-service costs $ 4,400 $ 10 5 80 customers 4,000 23 10. Seting and customer service capacity cost per customer 55.00 $ 5750 11 Advertising sta 12. Tutal advertsing s $ 22,000 $ 27.500 13 Advertising cost per employee $ 22,000 $ 27.500 1. Calculate the change in operating income of Danny Company in 2021 and 2022 2. Calculate the growth price-recovery and productivity components that explain the change in operating income from 2021 to 2022 3. Comment on your answer in requirement 2. What do these components indicate? Print Done Print Done de 2 4 93 54 Q W E A S MacBook Pro 95 20 D 6 36 49 T Y L .00 61 10 - H G H 0 P K L