Answer the Following Questions Using the Information Below:
Mitsufugi Company

question 88

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 the revenue effect of the growth component?

• A)$47 500 F
• B)$2500 U
• C)$52 500 U
• D)$45 000 F

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Definitions:

Biofeedback Training

A technique that teaches individuals to improve their health and performance by controlling physiological processes that are normally involuntary, using monitoring devices.

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Sudden discharges of electricity through a part of the body, often used for experimental, therapeutic, or punitive purposes.

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A condition in which a person or animal learns to behave helplessly, failing to respond even though there are opportunities for them to help themselves by avoiding unpleasant situations or by gaining positive rewards.

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The belief that one's actions are primarily controlled by personal decisions and efforts rather than external factors.