Answer the Following Questions Using the Information Below

question 161

Multiple Choice

Answer the following questions using the information below:
Following a strategy of product differentiation, Loftus Company makes a high-end Appliance, AP15. Loftus Company presents the following data for the years 2011 and 2012:
Loftus Company produces no defective units but it wants to reduce direct materials usage per unit of AP15 in 2012. Manufacturing conversion costs in each year depend on production capacity defined in terms of AP15 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. Loftus Company has 46 customers in 2011 and 50 customers in 2012. The industry market size for high-end appliances increased 5% from 2011 to 2012.
-What is operating income for 2011?

• A)$364,500
• B)$1,804,500
• C)$1,440,000
• D)$200,000

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Definitions:

High School Degree

A certificate of completion awarded to students who have successfully met the required criteria of education at the secondary school level.

Unskilled

Lacking specialized skill, training, or proficiency in a particular area or job.

Problem-Centered Orientation

A mindset where individuals focus on solving problems and coping with situations in a proactive and practical manner.

Traditional Students

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