Question

Trusted Products Company makes a household place with model conversion costs depend on production capacity efined in terms of available for 2017 and 2018 LA units The goal for 2018 is to reduce dre can be produced the market s fow sage per unit. No defective care produced Manufacturing a nces increased 10% from 2017 to 2018 The following data are priest 2017 35 000 31500 3345 500 92.000 Units of produced and sold Seling price Direct materials are fee) Directo r refoot Manufacturing capacity for Tocal conversion as Conversion co u nt of capacity tem, dans mutact Direct 43.750 42.150 $S6505547 950 What is the revenue fect of the growth component? DA 3085.200 F OR $1.200.000 OC. $285,200 u OD $1.250.000

Answer 1

Revenue Effect of the Growth Component:

=(38500-35000) * $360

=$ 1,260,000 Favorable

Hence correct answer is option( B).