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Following a strategy of product differentiation, Fanshawe Company makes a high-end appliance called the XX 300. Fanshawe Company presents the following data for years 1

Following a strategy of product differentiation, Fanshawe Company makes a high-end appliance called the XX 300. Fanshawe Company presents the following data for years 1 and 2.

Year 1 Year 2
Units of XX 300 produced and sold 10,000 10,800
Selling price $100 $115
Direct materials (litres) 30,000 31,900
Direct materials costs per litre $15 $16
Manufacturing capacity for XX 300 (units) 12,500 12,500
Total manufacturing conversion costs $250,000 $275,000
Manufacturing conversion costs (per unit of capacity) $20 $22
Selling and customer-service capacity (customers) 30 29
Total selling and customer-service costs $90,000 $90,625
Cost per customer of selling and customer-service capacity $3,000 $3,120

Fanshawe 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 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 nor customer-service costs are affected by changes in actual volume. Fanshawe 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. Referring to Fanshawe Company, which of the following is a measure of the financial perspective?

Question 6Select one:

a.market share in the high-end appliance market

b.reengineering

c.improving manufacturing processes

d.operating income growth from charging higher margins for XX 300

e.order delivery time

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