Answer the Following Questions Using the Information Below:
Mitsufugi Company

question 89

Multiple Choice

Answer the following questions using the information below:
Mitsufugi Company makes a kitchen appliance with model number KA450.The goal for 2018 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 KA450 units that can be produced.The industry market size for appliances increased 5% from 2017 to 2018.The following additional data are available for 2017 and 2018:
$$\begin{array} { l r r } & 2017 & 2018 \\\text { Units of KA450 produced and sold } & 10000 & 10300 \\\text { Selling price } & \$ 150 & \$ 145 \\\text { Direct materials (square metres) } & 30000 & 29000 \\\text { Direct material costs per square metre } & \$ 12 & \$ 13 \\\text { Manufacturing capacity for KA450 (units) } & 12500 & 12000 \\\text { Total conversion costs } & \$ 250000 & \$ 240000 \\\text { Conversion costs per unit of capacity } & \$ 20 & \$ 20\end{array}$$
-What is operating profit for 2017?

• A)$890 000
• B)$1 500 000
• C)$700 000
• D)$750 000

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Definitions:

Sign Stimulus

An external sensory cue that triggers a fixed action pattern in an organism, an innate response to a specific stimulus.

Dutch Ethologist

A Dutch ethologist is a scientist from the Netherlands who studies animal behavior through observational and experimental methods.

Habituation

A type of learning in which an animal becomes accustomed to a repeated, irrelevant stimulus and no longer responds to it.

Physiologically Ready

A state in which an organism or part of an organism is prepared for a specific physiological process or activity.