Project - Following a strategy of product differentiation. Computer Corporation makes a high-end Computer, High-end model. Computer Corporation presents the following data for the years 2015 and 2016.
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DATA Field:
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2015
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2016
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Units of High-end model produced and sold
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20,700
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20,850
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Selling Price
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$212
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$215
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Direct materials (pounds)
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60,000
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61,000
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Direct materials costs per pounds
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$20
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$21
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Manufacturing capacity for units
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25,000
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25,000
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Total manufacturing conversion costs
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$1,050,000
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$1,075,000
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Manufacturing conversion costs per unit
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$42
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$43
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Selling and customer-service capacity
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60
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59
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Total selling and customer-service costs
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$360,000
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$362,500
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Cost per customer of selling and customer -service capacity
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$6,000
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$6,144
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Computer Corporation produces no defective units but it wants to reduce direct materials usage per unit in 2016. Manufacturing conversion costs in each year depend on production capacity defined in terms of units that can be produced.
Selling and customer-service costs for each year depend on the number of customers that the selling and customer-service functions are designed to support each year. They had 50 customers in 2015 and 52 in 2016.
Required: Your solution should be on the analysis worksheet. Rounded to the nearest Dollar. You must use the Data Field above by linking and using formulas on the Analysis worksheet.
Part A: Please reference the analysis worksheet, which should contain your solution and I have tried to get you started.
You need to use cell references and use the "If" function to designate whether the component is Favorable or Unfavorable. On the designation of the total of the subvariances you must use a SUMIF statement. All of your computational answers must include cell references.
If a variance is zero you do not have to designate the variance as U or F , since that will save you a little bit of time. I will take off 1/2 pts. For each designation that does not use the IF function and SUM IF function for the totaling of each of the components-growth, price recovery, and productivity.
Variances should not be shown as a negative number, so please use the Absolute function, so none of your variances will show as a negative.
Calculate the following using only cell references on the sheet called analysis:
1. What is the operating income for 2015?
2. What is the operating income for 2016?
3. What is the change in operating income from 2015 to 2016?
4. Calculate the growth, price-recovery, and productivity components that explain the change in operating income from 2015 to 2016. Make sure you break the growth and price-recovery into revenue and cost effect subcomponents.
Part B: Answer the following questions based on your reading of chapter 13, application of this companies analysis, and our discussion of this topic in the discussion forum.
1. Which strategy is the company pursuing? Why?
2. Was the company's strategy successful in 2016? Why?
3. What do each of the components mean in respect to changes in operating income? You need to discuss Growth, price-recovery, and productivity.
Attachment:- Assignment.rar