Answer the Following Questions Using the Information Below:
Crynton Company

question 160

Multiple Choice

Answer the following questions using the information below:
Crynton Company makes a household appliance with model number L800. The goal for 2015 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 L800 units that can be produced. The industry market size for appliances increased 5% from 2014 to 2015. The following additional data are available for 2014 and 2015:
$\begin{array}{lrr}&2014&2015\\\text { Units of L800 produced and sold } & 30,000 & 31,500 \\\text { Selling price } & \$ 300 & \$ 285 \\\text { Direct materials (square feet) } & 90,000 & 87,000 \\\text { Direct material costs per square foot } & \$ 30 & \$ 33\\\text { Manufacturing capacity for L800 (units) } & 37,500 & 36,000 \\\text { Total conversion costs } & \$ 750,000 & \$ 720,000 \\\text { Conversion costs per unit of capacity } & \$ 60 & \$ 60\end{array}$
-Overall,was Crynton's strategy successful in 2015?

• A) Yes, because total revenues increased
• B) No, because operating income decreased
• C) No, because direct materials usage per unit increased
• D) No, because direct material cost per unit decreased

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Definitions:

Healthcare

The organized provision of medical care to individuals or a community.

Unselfishly

Characterized by acting or giving without consideration for personal gain.

Satisfied

A feeling of fulfillment or contentment with one's achievements, qualities, or situation.

Needs

Fundamental requirements or necessities essential for an individual's well-being and survival.