Meale Company makes a household appliance with model number X500. The goal for 2015 is to reduce direct materials usage per unit. 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: Units of X500 produced and sold Selling price Direct materials (square feet) Direct material costs per square foot Manufacturing capacity for X500 (units) Total conversion costs Conversion costs per unit of capacity 17) What is operating income for 2014? A) $450,000 B) $1,000,000 C) $750,000 D) $700,000 18) What is operating income for 2015? A) $1,045,000 B) $726,000 C) $486,000 D) $476,000 2014 10,000 $100 30,000 $10 12,500 $250,000 $20 2015 11,000 $95 29,000 $11 12,000 $240,000 $20

Meale Company makes a household appliance with model number X500. The goal for 2015 is to reduce direct materials usage per unit. 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: Units of X500 produced and sold Selling price Direct materials (square feet) Direct material costs per square foot Manufacturing capacity for X500 (units) Total conversion costs Conversion costs per unit of capacity 17) What is operating income for 2014? A) $450,000 B) $1,000,000 C) $750,000 D) $700,000 18) What is operating income for 2015? A) $1,045,000 B) $726,000 C) $486,000 D) $476,000 2014 10,000 $100 30,000 $10 12,500 $250,000 $20 2015 11,000 $95 29,000 $11 12,000 $240,000 $20

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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