Peter Company makes a high-end Appliance, Y45. Peter presents the following data for theyears 2019 and 2020:Units of Y45 produced and soldSelling priceDirect materials (square feet)Direct materials costs per square footManufacturing capacity in units of Y45Total conversion costs2019100,000$1,000300,000$1002020105,000$1,100307,500$110125,000$12,500,000 $13,750,000$100125,000Conversion costs per unit of capacitySelling and customer-service capacity (customers)Total selling and customer-service costsSelling and customer-service capacity cost per customer $15,000$110300300$4,500,000$4,687,500$15,625Peter produces no defective units but it wants to reduce direct materials usage per unit of Y45.Manufacturing conversion costs in each year depend on production capacity defined in termsof Y45 units that can be produced. Selling and customer-service costs depend on the number ofcustomers that the customer and service functions are designed to support. Peter had 280customers in 2019 and 290 customers in 2020.8. What is the revenue effect of the price recovery component?A. $10,500,000 FB. $5,000,000 UC. $5,000,000 FD. $10,500,000 U

The revenue effect of the price recovery component is ascertained by subtracting the selling price…

Peter Company makes a high-end Appliance, Y45. Peter presents the following data for the years 2019 and 2020: Units of Y45 produced and sold Selling price Direct materials (square feet) Direct materials costs per square foot Manufacturing capacity in units of Y45 2019 100,000 $1,000 300,000 $100 2020 105,000 $1,100 307,500 $110 125,000 $12,500,000 $13,750,000 125,000 Total conversion costs Conversion costs per unit of capacity Selling and customer-service capacity (customers) Total selling and customer-service costs Selling and customer-service capacity cost per customer $100 $110 300 $4,500,000 $4687,500 $15,000 300 $15,625 Peter produces no defective units but it wants to reduce direct materials usage per unit of Y45. Manufacturing conversion costs in each year depend on production capacity defined in terms of Y45 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. Peter had 280 customers in 2019 and 290 customers in 2020. 8. What is the revenue effect of the price recovery component? A. $10,500,000 F B. $5,000,000 U C. $5,000,000 F D. $10,500,000 U

Peter Company makes a high-end Appliance, Y45. Peter presents the following data for the years 2019 and 2020: Units of Y45 produced and sold Selling price Direct materials (square feet) Direct materials costs per square foot Manufacturing capacity in units of Y45 2019 100,000 $1,000 300,000 $100 2020 105,000 $1,100 307,500 $110 125,000 $12,500,000 $13,750,000 125,000 Total conversion costs Conversion costs per unit of capacity Selling and customer-service capacity (customers) Total selling and customer-service costs Selling and customer-service capacity cost per customer $100 $110 300 $4,500,000 $4687,500 $15,000 300 $15,625 Peter produces no defective units but it wants to reduce direct materials usage per unit of Y45. Manufacturing conversion costs in each year depend on production capacity defined in terms of Y45 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. Peter had 280 customers in 2019 and 290 customers in 2020. 8. What is the revenue effect of the price recovery component? A. $10,500,000 F B. $5,000,000 U C. $5,000,000 F D. $10,500,000 U

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

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Chapter1: Financial Statements And Business Decisions

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Question

Peter Company makes a high-end Appliance, Y45. Peter presents the following data for the
years 2019 and 2020:
Units of Y45 produced and sold
Selling price
Direct materials (square feet)
Direct materials costs per square foot
Manufacturing capacity in units of Y45
Total conversion costs
2019
100,000
$1,000
300,000
$100
2020
105,000
$1,100
307,500
$110
125,000
$12,500,000 $13,750,000
$100
125,000
Conversion costs per unit of capacity
Selling and customer-service capacity (customers)
Total selling and customer-service costs
Selling and customer-service capacity cost per customer $15,000
$110
300
300
$4,500,000
$4,687,500
$15,625
Peter produces no defective units but it wants to reduce direct materials usage per unit of Y45.
Manufacturing conversion costs in each year depend on production capacity defined in terms
of Y45 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. Peter had 280
customers in 2019 and 290 customers in 2020.
8. What is the revenue effect of the price recovery component?
A. $10,500,000 F
B. $5,000,000 U
C. $5,000,000 F
D. $10,500,000 U

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