trategic arid Competitive Question 4 (20 marks) nalysis, ACCT 356 Mark to review this question at the en am Instructions Emsting Ltd. makes high quality electronic components. Ernsting Lid. presents the following data for the past two years relating to its XJ649 product. age 1 of 1 Previous | Next CTION 1 Year 1 Units of XJ649 produced and sold Year 2 ANALYSIS 4,000 Selling price 4,320 Question 1 Q $800 $850 Direct materials (kilograms) 10,400 12,360 Question 2 Direct materials costs per kilogram $60 $64 Manufacturing capacity for XJ649 (units) Question 3 15,000 15,000 Conversion costs $1,350,000 $1,440,000 TION 2 Conversion costs per unit of capacity $90 $96 EN RESPONSE QUESTIONS Selling and customer-service capacity (customers) 80 78 Question 4 Q Total selling and customer-service costs $760,000 $780,000 Question 5 Q Selling and customer-service capacity cost per customer $9,500 $10,000 Question 6 Q Emsting produces no defective units, but it wants to reduce the direct materials usage per unit reflected in Year 2. Manufacturing conversion costs in each ye production capacity defined in terms of units that can be produced. Selling and customer-service costs depend on the number of customers that the custome Question 7 service functions are designed to support. Neither conversion costs nor customer-service costs are affected by changes in actual volume. Ernsting has 60 cu Question 8 Q and 66 customers in Year 2. The industry market size for the product increased 6% from Year 1 to Year 2. Of the $50 increase in unit selling price, $30 is att general price increase. of 1 Previous | Next Required: 10:01 AM a. Calculate the operating income for Year 1 and Year 2. (4 marks) b. Calculate the growth (both revenue and cost effect), price-recovery (both revenue and cost effect), and productivity components that explain the chang Hand In Exam income from Year 1 to Year 2. (10 marks) c. What type of strategy is the company pursuing cost leadership or value leadership? Support your answer using the variances calculated in part b (i.e variances may demonstrate what cost leadership strategy the company may be pursuing). (6 marks)