Answer the Following Questions Using the Information Below

question 112

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 cost effect of the price-recovery component?

• A)$179,000 F
• B)$179,000 U
• C)$241,000 U
• D)$420,000 F

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Definitions:

Sympathetic Nervous System

Part of the autonomic nervous system that prepares the body for action and stress, triggering the "fight or flight" response.

Digestion

The process by which the body breaks down food into smaller components, ultimately to be absorbed into the bloodstream for nutrition.

Pupil Dilation

The expansion of the pupil, influenced by light exposure, emotional states, and arousal levels.

Nervous System

The complex network of nerves and cells that transmits signals between different parts of the body.