Following A Strategy Of Product Differentiation Ahb Corporation Makes A High End Computer Monitor Kt7 Ahb Corporation 1 (28.17 KiB) Viewed 48 times
Following A Strategy Of Product Differentiation Ahb Corporation Makes A High End Computer Monitor Kt7 Ahb Corporation 2 (22.95 KiB) Viewed 48 times
Following a strategy of product differentiation, AHB Corporation makes a high-end computer monitor, KT7. AHB Corporation presents the following data for the years 2020 and 2021: 2020 2021 Units of KT7 produced and sold 10,000 10,500 Selling price $280 $300 Direct materials (pounds) 31,600 33,600 Direct materials costs per pound $17 $20 Manufacturing capacity for KT7 (units) 10.900 10.900 Conversion costs (fixed costs) $654,000 $708,500 Conversion costs per unit of capacity $60 $65
Conversion costs (fixed costs) $654,000 $708,500 Conversion costs per unit of capacity $60 $65 Manufacturing conversion costs in each year depend on production capacity defined in terms of KT7 units that can be produced. Required: What is the net effect on operating income as a result of the growth component? $91,760 $126,700 $106.000 $113,140
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