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Ratliff Appliances Company makes a household appliance with model number RM16. The goal for 2020...

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Accounting

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Ratliff Appliances Company makes a household appliance with model number RM16. The goal for 2020 is to reduce direct materials usage per unit. No defective units are currently produced. Manufacturing conversion costs depend on production capacity defined in terms of RM16 units that can be produced. The industry market size for appliances increased 10% from 2019 to 2020. The following additional data are available for 2019 and 2020 : 1. Do you think Ratliff Co. is following a strategy of product differentiation or cost leadership? Explain your reasons. 2. Compute the adjusted units for the flexible / variable resource. 3. compute the adjusted capacity for the committed/fixed resource. 4. Compute the net operating income for 2019. Show your work. 5. Compute the net operating income for 2020. Show your work. 6. Compute the change in net income from 2019 to 2020 and indicate favorable or unfavorable. 7. Compute the revenue effect of the Growth component and indicate favorable or unfavorable. 8. Compute the flexible / variable cost effect of the growth component and indicate favorable or unfavorable. 9. Compute the committed / fixed cost effect of the growth component and indicate favorable or unfavorable

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