UESTION 9 Following a strategy of product differentiation, Luke Company makes a high-end Appliance, AP15. Luke Company presents the following data for the years 1 and 2. Units of AP15 produced and sold Selling price 20,000 21,00 $22 60,000 61,500 $200 rect materials costs per square metre anufacturing capacity for AP15 (units) otal manufacturing conversion costs $2 25,000 25,000 $1000,000 $1,100,000 anufacturing conversion costs (per unit of capacity) Selling and customer- service capacity (customers) Total selling and customer-service costs $360,000 $362,500 Cost per customer of selling and capacity customer-service $6.000 $6.250 Luke Company produces no defective units but it wants to reduce direct materials usage per unit of AP15 in year 2. anufacturing conversion costs in each year depend on production capacity defined in terms of AP15 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 or customer-service costs are affected by changes in actual volume. Luke Company has 46 customers in year 1 and 50 customers in year 2. The industry market size for high-end appliances increased 5% from year 1 to year 2 What is Luke Company's productivity nent of change in operating income? $33,000 F UESTION 9 Following a strategy of product differentiation, Luke Company makes a high-end Appliance, AP15. Luke Company presents the following data for the years 1 and 2. Units of AP15 produced and sold Selling price 20,000 21,00 $22 60,000 61,500 $200 rect materials costs per square metre anufacturing capacity for AP15 (units) otal manufacturing conversion costs $2 25,000 25,000 $1000,000 $1,100,000 anufacturing conversion costs (per unit of capacity) Selling and customer- service capacity (customers) Total selling and customer-service costs $360,000 $362,500 Cost per customer of selling and capacity customer-service $6.000 $6.250 Luke Company produces no defective units but it wants to reduce direct materials usage per unit of AP15 in year 2. anufacturing conversion costs in each year depend on production capacity defined in terms of AP15 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 or customer-service costs are affected by changes in actual volume. Luke Company has 46 customers in year 1 and 50 customers in year 2. The industry market size for high-end appliances increased 5% from year 1 to year 2 What is Luke Company's productivity nent of change in operating income? $33,000 F