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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Strategic analysis of operating income.
1. Calculate the operating income of Stanmore Corporation in 2010 and 2011. Required
2. Calculate the growth, price-recovery, and productivity components that explain the change in operating income from 2010 to 2011.
3. Comment on your answer in requirement 2. What do these components indicate?
| Â | Â |
2010 |
2011 |
| Â |
Units of D4H produced and sold |
200 |
210 |
| Â |
Selling price |
$40,000 |
$42,000 |
| Â |
Direct materials (kilograms) |
300,000 |
310,000 |
| Â |
Direct material cost per kilogram |
$8 |
$8.50 |
| Â |
Manufacturing capacity in units of D4H |
250 |
250 |
| Â |
Total conversion costs |
$2,000,000 |
$2,025,000 |
| Â |
Conversion cost per unit of capacity (row 6 ÷ row 5) |
$8,000 |
$8,100 |
| Â |
Selling and customer-service capacity |
100 customers |
95 customers |
| Â |
Total selling and customer-service costs |
$1,000,000 |
$940,500 |
| Â |
Selling and customer-service capacity cost per customer(row 9 ÷ row 8) |
Â
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