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

question 44

Multiple Choice

Use the information below to answer the following question(s) .Following a strategy of product differentiation, Barry Company makes an XX 300.Barry Company presents the following data for the years 1 and 2. Barry Company produces no defective units but it wants to reduce direct materials usage per unit of XX 300 in year 2.Manufacturing conversion costs in each year depend on production capacity defined in terms of XX 300 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 or customer-service costs are affected by changes in actual volume.Barry Company has 23 customers in year 1 and 25 customers in year 2.The industry market size for high-end appliances increased 5% from year 1 to year 2.
-What is the Barry Company's cost effect of price-recovery component?

• A)$61,000 favourable
• B)$60,850 unfavourable
• C)$60,100 favourable
• D)$60,100 unfavourable
• E)$61,000 unfavourable

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Definitions:

Streptococci

A genus of coccus (spherical) bacteria that usually forms chains; known for causing various infections in humans and animals.

Alpha Proteobacteria

A class of Proteobacteria that includes a variety of species, some of which are capable of photosynthesis or nitrogen fixation.

Gram-Negative Bacteria

Bacteria with cell walls consisting of a thin peptidoglycan layer and a thick outer membrane. Compare with gram-positive bacteria

Cyanobacteria

Photosynthetic bacteria that produce oxygen, found in aquatic and terrestrial environments, sometimes causing blooms.