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Twisted Company makes a household appliance with model number 1800. The goal for 2018 is to reduce direct materials usage per unit. No defective units

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Twisted Company makes a household appliance with model number 1800. The goal for 2018 is to reduce direct materials usage per unit. No defective units are currently produced Manufacturing conversion costs depend on production capacity defined in terms of L800 units that can be produced The following additional data are available for 2017 and 2018: 2017 2018 5.000 5.500 $400 $440 15.000 15.375 $44 $40 10,000 10,000 $1.100.000 $1,000,000 Units of L800 produced and sold Selling price Direct materials (pounds) Direct materials costs per pound Manufacturing capacity for L800 (units Conversion costs Conversion costs per unit of capacity Selling and customer service capacity faustomers) Total selling and customer service costs Selling and customer service capacity cost per customer $100 $110 58 60 $360,000 $6.000 $362,500 $6,250 Selling costs depend on the number of customers that the customer and service functions are designed to support. The company nad 50 cutomers 2017 and 55 customers in 2018 The industry market size for the appliance increased 5% from 2017 to 2018 What is the cost effect of the price recovery component

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