35) Following a strategy of product differentiation, Izzy's Limited Company makes a high-end Appliance, XT15. Izzy's Limited presents the following data for the years 2017 and 2018:20172018Units of XT15 produced and sold50,00052,200Selling price$600$660Direct materials (square feet)155,000158,750Direct materials costs per square foot$55$60Manufacturing capacity in units of XT1562,60062,600Total conversion costs$6,510,400$6,886,000Conversion costs per unit of capacity$104$110Selling and customer-service capacity (customers)190190Total selling and customer-service costs$2,888,000$3,002,000Selling and customer-service capacity cost per customer$15,200$15,800Izzy's Limited produces no defective units but it wants to reduce direct materials usage perunit of XT15. Manufacturing conversion costs in each year depend on production capacity defined in terms of XT15 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. Izzy's Limited had 180 customers in 2017 and 185 customers in 2018.What is the revenue effect of the price-recovery component?
Diff: 2Objective: 4AACSB: Application of knowledge