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Doon Company manufactures an electronic component, ZP98 This component is significantly less expensive than similar products sold by Doon's competitors Order-processing time is very
Doon Company manufactures an electronic component, ZP98 This component is significantly less expensive than similar products sold by Doon's competitors Order-processing time is very short; however, approximately 10% of products are defective and returned by the customer. Returns and refunds are handled promptly Yorunt Manufacturing: Doon's main competitor, has a higher-priced product with almost no defects but a longer order-processing time. Assume that in 2019; Doon 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 Doon has raised Its selling price In line with the market. Sales have increased and returns have decreased. Doon's managers attribute this to higher quality and a price that is still less than Yorunt's Information about the current period (2019) and last penod (2018) follows O Data Table 52 S 10 S answers to the nearest whole dollar.) la_ 1b. lc_ 2. 3. 4_ 5. 6. 8. 10. 11 12. 13. Units of ZP98 produced and sold Units of ZP98 returned Net sales in units Selling price Direct materials (kilograms) used Direct material cost per kilogram Manufacturing capacity in units of ZP98 Total conversion costs Conversion cost per unit of capacity Selling and customer-service capacity Total selling and customer-service costs Selling and customer-service capacity cost per customer Advertising staff Total advertising costs Advertisinq cost per emp 2018 5,900 550 5,350 3,100 11.00 s 9,000 90,000 s 75 customers 4,300 57.33 s 2 52,000 s 26,000 s 2019 7,200 250 6,950 57 3,725 11.00 9,000 153,000 17 75 customers 60.00 fm-.l 2 64,000 32,000 O 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. Selling and customer-service costs depend on the number of customers that Doon can support: not the actual number of customers it serves Doon has 65 customers in 2018 and 75 customers in 2019. 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 ZP98 units produced and sold or the number of customers who buy ZP98 Done S S S S S S
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