R2D2 Corporation produces no defective units but it wants to reduce direct materials usage per...
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R2D2 Corporation produces no defective units but it wants to reduce direct materials usage per unit of BB8 in Year 2. Manufacturing conversion costs in each year depend on production capacity defined in terms of BB8 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. Neither conversion costs nor customer-service costs are affected by changes in actual volume. R2D2 Corporation has 46 customers in Year 1 and 50 customers in Year 2 . The industry market size for high-end computer monitors increased 5% from Year 1 to Year 2. Of the $40 increase in unit selling price, $10 was attributable to a general increase in prices.
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