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Merrill Company makes a household appliance with model number X800. The goal for 2020 is to reduce direct materials usage per unit. No defective units are produced. Manufacturing conversion costs depend on production capacity defined in terms of X800 units that can be produced. The following additional data are available for 2019 and 2020: 2019 b) $50,000 Favorable c) $20,000 Favorable d) $120,000 Unfavorable Units of X800 produced and sold Selling price Direct materials (square feet) Direct material costs per square foot Manufacturing capacity for X800s (units) Total manufacturing conversion costs Manufacturing conversion costs per unit of capacity $20 What is the revenue effect of the growth component of change in operating income, 2019 to 2020? a) $48,000 Favorable 10,000 $100 30,000 2020 $10 12,500 10,500 $96 29,000 $10.50 11,500 $250,000 $218,500 $19

Merrill Company makes a household appliance with model number X800. The goal for 2020 is to reduce direct materials usage per unit. No defective units are produced. Manufacturing conversion costs depend on production capacity defined in terms of X800 units that can be produced. The following additional data are available for 2019 and 2020: 2019 b) $50,000 Favorable c) $20,000 Favorable d) $120,000 Unfavorable Units of X800 produced and sold Selling price Direct materials (square feet) Direct material costs per square foot Manufacturing capacity for X800s (units) Total manufacturing conversion costs Manufacturing conversion costs per unit of capacity $20 What is the revenue effect of the growth component of change in operating income, 2019 to 2020? a) $48,000 Favorable 10,000 $100 30,000 2020 $10 12,500 10,500 $96 29,000 $10.50 11,500 $250,000 $218,500 $19

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Merrill Company makes a household appliance with model number X800. The goal for 2020 is to reduce direct materials usage per unit. No defective units are produced. Manufacturing conversion costs depend on production capacity defined in terms of X800 units that can be produced. The following additional data are available for 2019 and 2020: 2019 Units of X800 produced and sold Selling price Direct materials (square feet) Direct material costs per square foot Manufacturing capacity for X800s (units) Total manufacturing conversion costs Manufacturing conversion costs per unit of capacity $20 What is the revenue effect of the growth component of change in operating income, 2019 to 2020? a) $48,000 Favorable b) $50,000 Favorable c) $20,000 Favorable d) $120,000 Unfavorable 10,000 $100 30,000 2020 $10 12,500 10,500 $96 29,000 $10.50 11,500 $250,000 $218,500 $19
Transcribed Image Text:Merrill Company makes a household appliance with model number X800. The goal for 2020 is to reduce direct materials usage per unit. No defective units are produced. Manufacturing conversion costs depend on production capacity defined in terms of X800 units that can be produced. The following additional data are available for 2019 and 2020: 2019 Units of X800 produced and sold Selling price Direct materials (square feet) Direct material costs per square foot Manufacturing capacity for X800s (units) Total manufacturing conversion costs Manufacturing conversion costs per unit of capacity $20 What is the revenue effect of the growth component of change in operating income, 2019 to 2020? a) $48,000 Favorable b) $50,000 Favorable c) $20,000 Favorable d) $120,000 Unfavorable 10,000 $100 30,000 2020 $10 12,500 10,500 $96 29,000 $10.50 11,500 $250,000 $218,500 $19
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