Following a Strategy of Product Differentiation,Izzy's Limited Company Makes a High-End

question 18

Multiple Choice

Following a strategy of product differentiation,Izzy's Limited Company makes a high-end Appliance,XT15.Izzy's Limited presents the following data for the years 2017 and 2018:

Izzy's Limited produces no defective units but it wants to reduce direct materials usage per unit of XT15.Manufacturing conversion costs in each year depend on production capacity defined in terms of XT15 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.Izzy's Limited had 160 customers in 2017 and 165 customers in 2018.
What is the net effect on operating income as a result of the price-recovery component? (Round any intermediary calculations to two decimals and your final answer to the nearest dollar. )

• A)$1,292,700 F
• B)$1,545,000 U
• C)$1,292,700 U
• D)$1,545,000 F

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Definitions:

Identifying Differences

The process of recognizing and acknowledging the distinct characteristics, attributes, or qualities between things or persons.

Workplace Sexual Harassment

Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature in a professional setting.

Men

Adult human males, often discussed in various socio-cultural, psychological, or biological contexts.

Illegal

Actions or activities that are forbidden by law.