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Answer the Following Questions Using the Information Below:
Mitsufugi Company

question 114

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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:
20172018 Units of KA450 produced and sold 1000010300 Selling price $150$145 Direct materials (square metres)  3000029000 Direct material costs per square metre $12$13 Manufacturing capacity for KA450 (units)  1250012000 Total conversion costs $250000$240000 Conversion costs per unit of capacity $20$20\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}
-Which strategy is Mitsufugi Corporation pursuing?

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