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The VaporX manufactures an entry-level hoverboard, HOV-X. Pursuing a cost-leadership strategy, the company has tried to improve quality and reduce costs. As a result
The VaporX manufactures an entry-level hoverboard, HOV-X. Pursuing a cost-leadership strategy, the company has tried to improve quality and reduce costs. As a result of the actions taken over the last year, quality has significantly improved in 2020 while rework and unit costs of the HOV-X have decreased. VaporX has reduced manufacturing capacity because capacity is no longer needed to support rework. VaporX has also lowered HOV-X's selling price to gain market share and unit sales have increased. Information about the current period (2020) and last period (2019) follows: (Click the icon to view the information.) (Click the icon to view additional information.) Data table 1. Units of HOV-X produced and sold 2. Selling price 3. Direct materials used (kits) elling 2019 2020 5,000 10,000 91 $ 11,000 82 12,000 capad More info Conversion costs in each year depend on production capacity defined in terms of kits that can be processed, not the actual kits started. Selling and customer-service costs depend on the number of customers that VaporX can support, not the actual number of customers it serves. VaporX has 79 customers in 2019 and 84 customers in 2020. of cu
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