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This is cost accounting, please show all correct work. Following a strategy of product differentiation, Arseniq Company makes a high-end Appliance, XT15 Arseniq presents the
This is cost accounting, please show all correct work.
Following a strategy of product differentiation, Arseniq Company makes a high-end Appliance, XT15 Arseniq presents the following data for the years 2017 and 2018 2017 2018 Units of XT15 produced and sold Selling price Direct materials (square feet) Direct materials costs per square foot Manufacturing capacity in units of XT15 50,000 52,500 $500 $550 150,000 $50 62,500 $6,250,000 153,750 $55 62,500 $6,875,000 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 customer $100 150 $110 150 $2,250,000 $15,000 $2,343,750 $15,625 Arseniq 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 customer-service costs depend on the number of customers that the customer and service functions are designed to support. Arseniq had 140 customers in 2017 and 145 customers in 2018 Required: 1. What is the revenue effect of the price-recovery component? What is the cost effect of the price-recovery component? 2. Following a strategy of product differentiation, Arseniq Company makes a high-end Appliance, XT15 Arseniq presents the following data for the years 2017 and 2018 2017 2018 Units of XT15 produced and sold Selling price Direct materials (square feet) Direct materials costs per square foot Manufacturing capacity in units of XT15 50,000 52,500 $500 $550 150,000 $50 62,500 $6,250,000 153,750 $55 62,500 $6,875,000 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 customer $100 150 $110 150 $2,250,000 $15,000 $2,343,750 $15,625 Arseniq 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 customer-service costs depend on the number of customers that the customer and service functions are designed to support. Arseniq had 140 customers in 2017 and 145 customers in 2018 Required: 1. What is the revenue effect of the price-recovery component? What is the cost effect of the price-recovery component? 2Step by Step Solution
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