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q 13 Following a strategy of product differentiation, Strike Company makes a high end golf club called Smack Strike Company presents the following data for
q 13
Following a strategy of product differentiation, Strike Company makes a high end golf club called Smack Strike Company presents the following data for the years 1 and 2 Year 1 Year 2 Units of Smack produced and sold Selling price Direct materials (square metres) Direct materials costs per square metre Manufacturing capacity for Smack (units) Total manufacturing conversion costs Manufacturing conversion costs (per unit of capacity) Selling and customer service capacity (customers) Totalcalling and customer-centrica cncta 20,000 $210 55,000 $18 24.000 21,200 $225 60,000 $24 25,000 $850,000 $34 70 $278.000 $768.000 $32 80 UABR 100 Drucunalendis (Square HUS) Direct materials costs per square metre 33 UUUUU $18 Manufacturing capacity for Smack (units) $24 24.000 Total manufacturing conversion costs 25 000 $768.000 $850,000 Manufactunng conversion costs (per unit of capacity) $32 $34 Selling and customer service capacity (customers) 80 70 Total selling and customer-service costs $436,000 $378,000 Cost per customer of selling and customer-service capacity $5,450 $5 400 Strike Company produces no defective units but it wants to reduce direct materials usage per unit of Smack in year 2 Manufacturing conversion costs in each year depend on production capacity defined in terms of Smack 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 or customer-service costs are affected by changes in actual volume. Stike Company has 46 customers in year 1 and 50 customers in year 2. The industry market size for high-end golf clubs increased 5% from year 1 to year 2 What is the Strike Company's productivity component of change in operating income? O A. $20,800 unfavourable O B. $45,500 favourable O C. $33,000 favourable OD $45,500 unfavourable O E $33,000 unfavourable Following a strategy of product differentiation, Strike Company makes a high end golf club called Smack Strike Company presents the following data for the years 1 and 2 Year 1 Year 2 Units of Smack produced and sold Selling price Direct materials (square metres) Direct materials costs per square metre Manufacturing capacity for Smack (units) Total manufacturing conversion costs Manufacturing conversion costs (per unit of capacity) Selling and customer service capacity (customers) Totalcalling and customer-centrica cncta 20,000 $210 55,000 $18 24.000 21,200 $225 60,000 $24 25,000 $850,000 $34 70 $278.000 $768.000 $32 80 UABR 100 Drucunalendis (Square HUS) Direct materials costs per square metre 33 UUUUU $18 Manufacturing capacity for Smack (units) $24 24.000 Total manufacturing conversion costs 25 000 $768.000 $850,000 Manufactunng conversion costs (per unit of capacity) $32 $34 Selling and customer service capacity (customers) 80 70 Total selling and customer-service costs $436,000 $378,000 Cost per customer of selling and customer-service capacity $5,450 $5 400 Strike Company produces no defective units but it wants to reduce direct materials usage per unit of Smack in year 2 Manufacturing conversion costs in each year depend on production capacity defined in terms of Smack 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 or customer-service costs are affected by changes in actual volume. Stike Company has 46 customers in year 1 and 50 customers in year 2. The industry market size for high-end golf clubs increased 5% from year 1 to year 2 What is the Strike Company's productivity component of change in operating income? O A. $20,800 unfavourable O B. $45,500 favourable O C. $33,000 favourable OD $45,500 unfavourable O E $33,000 unfavourableStep by Step Solution
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