Question :
31) What the change in operating income from 2014 to : 1211786
31) What is the change in operating income from 2014 to 2015?
A) $2,200,000 U
B) $3,875,000 F
C) $2,200,000 F
D) $3,875,000 U
32) What is the revenue effect of the growth component?
A) $2,625,000 F
B) $1,250,000 U
C) $2,625,000 U
D) $1,250,000 F
33) What is the cost effect of the growth component?
A) $375,000 U
B) $1,506,250 U
C) $1,506,250 O
D) $375,000 O
34) What is the net effect on operating income as a result of the growth component?
A) $1,118,750 F
B) $875,000 F
C) $875,000 U
D) $1,118,750 U
35) What is the revenue effect of the price-recovery component?
A) $2,625,000 U
B) $1,250,000 U
C) $1,250,000 F
D) $2,625,000 F
36) What is the cost effect of the price-recovery component?
A) $375,000 F
B) $375,000 U
C) $1,506,250 U
D) $1,506,250 F
37) What is the net effect on operating income as a result of the price-recovery component?
A) $1,118,750 F
B) $875,000 U
C) $1,118,750 U
D) $875,000 F
38) What is the net effect on operating income as a result of the productivity component?
A) $875,000 U
B) $206,250 F
C) $875,000 F
D) $206,250 U
39) An analysis of Baker, Inc.’s operating income for the last two years showed the following:
Operating income for 2011
$1,200,000
Add growth component
30,000
Add price-recovery component
200,000
Deduct productivity component
(16,000)
Operating income for 2012
$1,414,000
This gain in operating income is consistent with a ________.
A) downsizing strategy
B) reengineering strategy
C) product differentiation strategy
D) cost leadership strategy
40) Cobalt Company makes a household appliance with model number X500. The goal for 2015 is to improve product design and outlook. No defective units are currently produced. Manufacturing conversion costs depend on production capacity defined in terms of X500 units that can be produced. The industry market size for appliances increased 10% from 2014 to 2015. The following additional data are available for 2014 and 2015:
20142015
Units of X500 produced and sold20,00020,000
Selling price$150$170
Direct materials (square feet)30,00032,500
Direct material costs per square foot$10$10
Manufacturing capacity for X500 (units)20,50020,500
Total conversion costs$451,000$493,250
Conversion costs per unit of capacity$22$22.5
Out of the two basic strategies, Cobalt’s strategy is ________.
A) product differentiation because Cobalt is able to produce a given quantity of output with a lower cost of inputs
B) cost leadership because Cobalt is able to produce a given quantity of output with a lower cost of inputs
C) cost leadership because Cobalt is able to increase its output price faster than the increase in its input prices
D) product differentiation because Cobalt is able to increase its output price faster than the increase in its input prices
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