How to calculate operating income for cost accounting

1) (10 points) Meale Company makes a household appliance with model number X500. The goal for 2012 is to reduce direct materials usage per unit. No defective units are currently produced. Manufacturing conversion costs depend on production capacity defined in terms of X500 units that can be produced. The industry market size for appliances increased 10% from 2011 to 2012. The following additional data are available for 2011 and 2012: Units of X500 produced and sold Selling price Direct materials (square feet) Direct material costs per square foot Manufacturing capacity for X500 (units) Total conversion costs Conversion costs per unit of capacity a) What is operating income for 2011? b) What is operating income for 2012? 2011 10,000 $100 30,000 $10 12,500 $250,000 $20 2012 11,000 $95 29,000 $11 12,000 $240,000 $20