Following a strategy of product differentiation, Arseniq Company makes a high-en
ID: 2398254 • Letter: F
Question
Following a strategy of product differentiation, Arseniq Company makes a high-end Appliance, XT15. Arseniq presents the following data for the years 2016 and 2017:
2016 2017
Units of XT15 produced and sold 50,000 52,500
Selling price $500 $550
Direct materials (square feet) 150,000 153,750
Direct materials costs per square foot $50 $55
Manufacturing capacity in units of XT15 62,500 62,500
Total conversion costs $6,250,000 $6,875,000
Conversion costs per unit of capacity $100 $110
Selling and customer-service capacity (customers) 150 150
Total selling and customer-service costs $2,250,000 $2,343,750
Selling and customer-service capacity cost per customer $15,000 $15,625
Arseniq produces no defective units but it wants to reduce direct materials usage per unit of XT15. Manufacturing conversion costs in each year depend on production capacity defined in terms of XT15 units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Arseniq had 140 customers in 2016 and 145 customers in 2017.
Please post the answer in table form exactly like i posted please.
Income Statement Amounts in 2016 Revenue and Cost Effects of Growth Components in 2017 Revenue and Cost Effects of Price-Recovery Component in 2017 Cost Effect of Productivity Component in 2017 Income Statement Amounts in 2017. Revenues($) ? ? ? ? ? Direct Materials(Variable) ? ? ? ? ? Conversion costs(Fixed) ? ? ? ? ? Selling and customer service costs(Fixed) ? ? ? ? ? Operating Income ? ? ? ? ?Explanation / Answer
Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you. A B C D Income Statement Amounts in 2016 Revenue and Cost Effects of Growth Components in 2017 Revenue and Cost Effects of Price-Recovery Component in 2017 Cost Effect of Productivity Component in 2017 Income Statement Amounts in 2017. Working Amount Working Amount Working Amount Working Amount Working Amount Revenues($) 50000*500 25000000 2500*500 1250000 52500*50 2625000 A+B+C 28875000 Direct Materials(Variable) 150000*50 7500000 3750*50 187500 (150000/50000*52500)*(55-50) 787500 ((150000/50000*52500)-153750)*(55-50) -18750 A+B+C 8456250 Conversion costs(Fixed) 6250000 62500*10 625000 A+B+C+D 6875000 Selling and customer service costs(Fixed) 2250000 625*150 93750 A+B+C+D 2343750 Operating Income 9000000 1062500 1118750 18750 11200000