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Following a strategy of product differentiation, Izzy's Limited Company makes a high -end Appliance, XT15. Izzy's Limited presents the following data for the years 2017
Following a strategy of product differentiation, Izzy's Limited Company makes a high -end Appliance, XT15. Izzy's Limited presents the following data for the years 2017 and 2018: 2018 2017 of XT15 produced and sold 57.000 $500 158.000 $54 63.800 Selling price Direct materials (square feet) Direct materials costs per square foot Manufacturing capacity in units of XT15 Total conversion costs Conversion costs per unit of capacity Selling and customer-service capacity (customers) Total selling and customer-service costs Selling and customer-service capacity cost per oustomer 60,000 $530 161.300 501 3.800 $7,018.000 $7,592,200 $119 150 $2,310.000 2.407.500 $16.050 $110 150 $15.400 izzys Limted produces no defective unts 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 thai can be produced Selling and cusiomer-service costs depend on the numbe of customers that the customer and service funcoions are designed to support izzy's Limited had 140 customers in 2017 and 145 customers in 2018. what s the revenue etect of the price-recovery component? O A. $1,800,000 F B. $1.500.000 u
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