Question

Following a strategy of product differentiation, Arseniq Company makes a high-end Appliance, XT15. Arseniq presents the following data for the years 2016 and 2017:

                                                                                                                               2016                     2017

        Units of XT15 produced and sold 50,000                  52,500

        Selling price                                                                                                 $500                     $550

        Direct materials (square feet) 150,000                153,750

        Direct materials costs per square foot $50                       $55

        Manufacturing capacity in units of XT15 62,500                  62,500

        Total conversion costs $6,250,000           $6,875,000

        Conversion costs per unit of capacity                                                   $100                     $110

        Selling and customer-service capacity (customers)                             150                       150

        Total selling and customer-service costs $2,250,000           $2,343,750

        Selling and customer-service capacity cost per customer $15,000                $15,625

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 140 customers in 2016 and 145 customers in 2017.

Please post the answer in table form exactly like i posted please.

Income Statement Amounts in 2016 Revenue and Cost Effects of Growth Components in 2017 Revenue and Cost Effects of Price-Recovery Component in 2017 Cost Effect of Productivity Component in 2017 Income Statement Amounts in 2017. Revenues($) ? ? ? ? ? Direct Materials(Variable) ? ? ? ? ? Conversion costs(Fixed) ? ? ? ? ? Selling and customer service costs(Fixed) ? ? ? ? ? Operating Income ? ? ? ? ?

Answer 1

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		A		B		C		D
	Income Statement Amounts in 2016		Revenue and Cost Effects of Growth Components in 2017		Revenue and Cost Effects of Price-Recovery Component in 2017		Cost Effect of Productivity Component in 2017		Income Statement Amounts in 2017.
	Working	Amount	Working	Amount	Working	Amount	Working	Amount	Working	Amount
Revenues($)	50000*500	25000000	2500*500	1250000	52500*50	2625000			A+B+C	28875000
Direct Materials(Variable)	150000*50	7500000	3750*50	187500	(150000/50000*52500)*(55-50)	787500	((150000/50000*52500)-153750)*(55-50)	-18750	A+B+C	8456250
Conversion costs(Fixed)		6250000			62500*10	625000			A+B+C+D	6875000
Selling and customer service costs(Fixed)		2250000			625*150	93750			A+B+C+D	2343750
Operating Income		9000000		1062500		1118750		18750		11200000