Following A Strategy Of Product Differentiation Ahb Corporation Makes A High End Computer Monitor Kt7 Ahb Corporation 1 (31.02 KiB) Viewed 61 times
Following A Strategy Of Product Differentiation Ahb Corporation Makes A High End Computer Monitor Kt7 Ahb Corporation 2 (23.75 KiB) Viewed 61 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 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 price-recovery component? $57,230 $54,700 $110,460 $55,960
Join a community of subject matter experts. Register for FREE to view solutions, replies, and use search function. Request answer by replying!