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

question 61

Essay

Use the information below to answer the following question(s).
Following a strategy of product differentiation,Despotovich Corporation makes a high-end Computer Monitor,CM12.Despotovich Corporation presents the following data for the years 1 and 2:
Despotovich Corporation produces no defective units but it wants to reduce direct materials usage per unit of CM12 in Year 2.Manufacturing conversion costs in each year depend on production capacity defined in terms of CM12 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 nor customer-service costs are affected by changes in actual volume.Despotovich Corporation has 46 customers in Year 1 and 50 customers in Year 2 .The industry market size for high-end computer monitors increased 5% from Year 1 to Year 2.Of the $40 increase in unit selling price,$10 was attributable to a general increase in prices.
-Required:
What is the amount of the productivity component?

---

Definitions:

Means-tested Programs

Government assistance programs that are available only to individuals or families whose incomes fall below a certain level.

Eligibility

The state of being qualified or suitable for a certain purpose or conditions.

Officially Considered

A status or perspective that is recognized or acknowledged by authoritative or formal entities.

Implicit Marginal Tax Rate

The rate at which future benefits decrease as an individual’s income increases due to the phasing out of assistance or benefits.