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this is how the question was provided by the prof. there is no other info. UESTION C: Profitability analysis Appareil Appliances Ltd. (AA) makes a

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this is how the question was provided by the prof. there is no other info.
UESTION C: Profitability analysis Appareil Appliances Ltd. (AA) makes a high-end waffle iron called the Gaufre 101 which is distributed to appliance retailers throughout Canada. The irons are in high demand from 5 star hotels where they are used in hotel breakfast rooms. AA presents the following data for the 2019 and 2020. 2019 2020 Units of Gaufre 101 produced and sold 20,000 21,000 Selling price $2001 $220 Direct materials (kilograms) 60,000 61,500 Direct materials costs per kilogram $20 $22 Manufacturing capacity for Gaufre 101 (units) 25,000 25,000 Total manufacturing conversion costs $1,000,000 $1,100,000 Manufacturing conversion costs (per unit of capacity) $40 $44 Selling and customer-service capacity (customers) 60 58 Total selling and customer-service costs $360,000 $362,500 Cost per customer of selling and customer- service capacity $6.000 $6.250 AA produces no defective units but it wanted to reduce direct materials usage per unit of the Gaufre 1010 in 2020. Manufacturing conversion costs in each year depend on production capacity defined in terms of Gaufre 101 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 nor customer-service costs are affected by changes in actual volume. AA has 46 customers in 2019 and 50 customers in year 2020. The industry market size for small high-end appliances increased 5% from 2019 to year 2020. The following questions relate to the above data 3. What is the change in operating income from 2019 to 2020? A) $620,000 favourable B) $364,500 unfavourable C) $364,500 favourable D) $200,000 favourable 4. What is the net increase in operating Income as a result of the growth component? A) $340,000 unfavourable B) $140,000 favourable C) $160,000 favourable D) $250,000 unfavourable 5 What is the net increase in operating income as a result of the price-recovery component? A) $179,000 favourable B) $179,000 unfavourable C) $182.000 unfavourable D) $ 20,000 favourable 6. What is the productivity component of change in operating income? A) $33,000 favourable B) $33,000 unfavourable C) $45,500 favourable D) $45,500 unfavourable

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