Following a strategy of product differentiation, Arseniq Company makes a high-end Appliance, XT15.Arseniq presents the following data for the years 2014 and 2015:201459.000$600154,0002015Units of XT15 produced and aoldSelling priceDirect materials (square feet)Direct matenals costs per square footManufacturing capacity in units of XT15Total convermon costs61,500$650157,200$6863,500$7.429,500$6063,500$6,985,000Conversion costs perunit of capaatySelling and oustomer-ervice capacity (customers)Total selling and customer-ervice contsSelling and customer-service capacity cost per customer$110$117190$2.907,000$15,300190$3,030,500$15,950Arseniq 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 ofXT15 units that can be produced. Selling and customer-service costs depend on the number ofcustomers that the customer and service functions are designed to support. Arseniq had 175customers in 2014 and 180 customers in 2015.What is the revenue effect of the growth component?O $1.500,000 UO $3.075,000 FO $3,075,000 UO $1,500,000 F

Revenue increases due to two reasons : 1. sale in increase in number of units by 2500 2. increase…

Following a strategy of product differentiation, Arseniq Company makes a high-end Appliance, XT15. Arseniq presents the following data for the years 2014 and 2015: Units of XT15 produced and aold Selling price Direct matenals (aquare feet) Direct matenals cots per square foot Manufacturing capacity in units of XT15 Total converton costs 2014 59.000 $600 154.000 2015 61,500 $650 157,200 $68 $60 63,500 $6,985,000 $110 190 $2.907,000 $15,300 63,500 $7.429,500 $117 Converrion costs per unut of capaaty Selling and oustomer-ærvice capacity (eustomere) Total selling and customer-ervice conts Selling and customer-ervice capacity cost per customer 190 $3,030,500 $15, 950 Arseniq 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. Arseniq had 175 customers in 2014 and 180 customers in 2015. What is the revenue effect of the growth component? O $1.500,000 U O $3,075,000 F O 3.075,000 U O $1,500,000 F

Following a strategy of product differentiation, Arseniq Company makes a high-end Appliance, XT15. Arseniq presents the following data for the years 2014 and 2015: Units of XT15 produced and aold Selling price Direct matenals (aquare feet) Direct matenals cots per square foot Manufacturing capacity in units of XT15 Total converton costs 2014 59.000 $600 154.000 2015 61,500 $650 157,200 $68 $60 63,500 $6,985,000 $110 190 $2.907,000 $15,300 63,500 $7.429,500 $117 Converrion costs per unut of capaaty Selling and oustomer-ærvice capacity (eustomere) Total selling and customer-ervice conts Selling and customer-ervice capacity cost per customer 190 $3,030,500 $15, 950 Arseniq 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. Arseniq had 175 customers in 2014 and 180 customers in 2015. What is the revenue effect of the growth component? O $1.500,000 U O $3,075,000 F O 3.075,000 U O $1,500,000 F

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter12: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 12.16E: Product cost concept of product pricing Based on the data presented in Exercise 12-15, assume that...

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