Following a strategy of product differentiation, Barry Company makes an XX $300.$ Barry Company presents the following data for the years $1$ and $2.$

Barry Company produces no defective units but it wants to reduce direct materials usage per unit of XX $300$ in year $2.$ Manufacturing conversion costs in each year depend on production capacity defined in terms of XX $300$ units t

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. Neither conversion costs or customer$-$service costs are affected by

changes in actual volume. Barry Company has $23$ customers in year $1$ and $25$ customers in year $2.$ The industry market size for high$-$end appliances increased $5\%$ from year $1$ to year $2.$

What is the Barry Company's productivity component of change in operating income?

Select one: $,$ e

A$.$ $$11,120$ favourable

B$.$ $$33,520$ unfavourable

C$.$ $$31,620$ favourable

D$.$ $$33,520$ favourable

E$.$ $$11,120$ unfavourable

he right answer is:$11,120$ show steps