Answer the Following Questions Using the Information Below

question 23

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 the change in operating income from 2011 to 2012?

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

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Definitions:

Persistence

The quality of continuing steadily despite problems or difficulties.

Complex Task

A task that involves multiple steps, variables, or layers of difficulty, requiring advanced skills or thought processes to complete.

Social Learning Theory

A theory that proposes learning occurs within a social context, and behaviors are learned through observing and imitating others.

Employee Behavior

Refers to the actions and conduct of individuals within a workplace setting, influenced by various internal and external factors.