Use the Information Below to Answer the Following Question(s)

question 67

Multiple Choice

Use the information below to answer the following question(s) .Following a strategy of product differentiation, Barry Company makes an XX 300.Barry Company presents the following data for the years 1 and 2. Barry Company produces no defective units but it wants to reduce direct materials usage per unit of XX 300 in year 2.Manufacturing conversion costs in each year depend on production capacity defined in terms of XX 300 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.Neither conversion costs or customer-service costs are affected by changes in actual volume.Barry Company has 23 customers in year 1 and 25 customers in year 2.The industry market size for high-end appliances increased 5% from year 1 to year 2.
-What is the Barry Company's cost effect of growth component?

• A)$7,500 favourable
• B)$28,500 favourable
• C)$7,500 unfavourable
• D)$28,500 unfavourable
• E)$30,000 favourable

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Definitions:

Optimism

A mental attitude characterized by hope and confidence in success and a positive future.

Low Level

Refers to processes, operations, or phenomena that are basic, fundamental, or close to the underlying mechanism or hardware.

High Level

A term often used to describe actions, decisions, or concepts that are complex, abstract, or involve broad oversight or influence.

Coping Methods

Coping methods are strategies or techniques that individuals use to manage or mitigate stress and emotional discomfort.