Answer the Following Questions Using the Information Below

question 70

Multiple Choice

Answer the following questions using the information below:
Meale Company makes a household appliance with model number X500. The goal for 2012 is to reduce direct materials usage per unit. No defective units are currently produced. Manufacturing conversion costs depend on production capacity defined in terms of X500 units that can be produced. The industry market size for appliances increased 10% from 2011 to 2012. The following additional data are available for 2011 and 2012:

-Overall, was Meale's strategy successful in 2012?

• A)No, because the selling price per unit decreased.
• B)Yes, because operating income increased.
• C)Yes, because less direct materials were used.
• D)No, because more units were produced and sold.

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Definitions:

Conductor

A device or material that permits current to flow through it easily.

Circular Mil

An area measure of wire determined by squaring the diameter of the wire in mils (1 mil = 0.001 inch). Example: A wire with a diameter of 0.020 inch would have a circular mil area of 400 cmil (20 x 20 = 400).

Radius

A straight line from the center to the circumference of a circle or sphere.

Diameter

A straight line passing from side to side through the center of a body or figure, especially a circle or sphere, measuring the overall distance across.