Following a Strategy of Product Differentiation, Izzy's Limited Company Makes

question 77

Multiple Choice

Following a strategy of product differentiation, Izzy's Limited Company makes a high-end Appliance, XT15. Izzy's Limited presents the following data for the years 2017 and 2018:

Izzy's Limited 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. Izzy's Limited had 160 customers in 2017 and 165 customers in 2018.
What is the cost effect of the growth component? (Round any intermediary calculations to two decimals and your final answer to the nearest dollar.)

• A) $280,500 U
• B) $1,449,700 U
• C) $1,449,700 F
• D) $280,500 F

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Definitions:

Power Distance

A cultural dimension that describes the extent to which people in a society accept or expect power inequalities among themselves.

Bypass

To avoid or circumvent an obstacle or regulation, often using an alternative path or method.

Submissively

In a manner that shows a willingness to conform to the authority or will of others, often by yielding one's own preferences.

Long-Term Orientation

A cultural dimension that reflects a society's attitude towards future challenges and opportunities, emphasizing perseverance and savings for future benefit.