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

question 114

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 135 customers in 2017 and 140 customers in 2018.
What is the change in operating income from 2017 to 2018?

• A) $2,418,350 U
• B) $3,740,000 F
• C) $2,418,350 F
• D) $3,740,000 U

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Definitions:

Benchmarking Partners

Organizations a company compares itself to for the purpose of measuring and improving performance, quality, or processes.

Internal

Pertaining to or happening within an organization or entity, as opposed to external factors or influences.

Competitive

The characteristic of being able to outperform competitors or rivals in a market.

HR Practices

A set of policies and procedures implemented by an organization's human resources department to manage employees and ensure effective workforce management.