Need help?

Name Problems (10 points each) Compute solutions to the following problems. You must show your work to receive full credit for your solu formulae and clearly label numbers expressing your solution using the appropriate units. 1) Following a strategy of product differentiation, Americonic Corporation makes a high-end computer monitor Americonic Corporation presents the following data for the years 2017 and 2018: 2012 6,000 $420 16,000 $40 10,000 Units produced and sold Selling price Direct materials (pounds) Direct materials costs per pound Manufacturing capacity (units) 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 6,500 $440 16,375 $44 10,000 1,000,000 $1,100,000 $100 60 $110 58 $6,000 $6,250 Somerset Corporation produces no defective units but it wants to reduce direct materials usage per unit in 2018. Manufacturing conversion costs in each year depend on production capacity defined in terms of 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. Ernsting Corporation has 50 customers in 2017 and 57 customers in 2018. The industry market size for high-end computer monitors increased 5% from 2017 to 2018. Required: a. What is the revenue effect of the growth component? b. What is the cost effect of the growth component? c. What is the net effect on operating income as a result of the growth component