Following a strategy of product differentiation, Izzy's Limited Company makes a

highend

Appliance, XT15. Izzy's Limited presents the following data for the years 2019 and 2020:

	2019	2020
Units of XT15 produced and sold	58,000	61,000
Selling price	$400	$440
Direct materials (square feet)	157,000	160,200
Direct material costs per square foot	$52	$58
Manufacturing capacity in units of XT15	63,900	63,900
Total conversion costs	$7,029,000	$7,412,400
Conversion costs per unit of capacity	$110	$116
Selling and customerservice capacity (customers)	180	180
Total selling and customerservice costs	$2,790,000	$2,880,000
Selling and customerservice capacity cost per customer	$15,500	$16,000

Izzy's Limited produces no defective units but it wants to reduce direct materials usage per unit of XT15. Manufacturing conversion costs in each year depend on production capacity defined in terms of XT15 units that can be produced. Selling and

customerservice

costs depend on the number of customers that the customer and service functions are designed to support. Izzy's Limited had

170

customers in 2019 and

175

customers in 2020.

What is the cost effect of the growth component? (Round any intermediary calculations to two decimals and your final answer to the nearest dollar.)

A. $432,120U B. $1,465,260U C. $432,120F