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

question 44

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 price-recovery component?

• A)$61,000 favourable
• B)$60,850 unfavourable
• C)$60,100 favourable
• D)$60,100 unfavourable
• E)$61,000 unfavourable

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Definitions:

Closed Systems Theory

An approach in organizational theory that views organizations as systems that are self-contained and do not interact with the outside environment.

Funding

The act of providing financial resources, typically in the form of money, or other values such as effort or time, to finance a need, program, and project, usually by an organization or government.

City Governments

The administrative bodies that govern cities or towns, responsible for local policy making, public services, and regulatory enforcement within their jurisdictions.

Open Compensation

A policy or practice where an organization makes salary ranges and compensation figures publicly available or transparent within the company.