Question

Consider the financial data presented for Trinity.:

                                                                                    2016                           2017

            Units produced                                             1,000,000                  1,250,000

            Selling price                                                  $25                             $22

            Direct materials                                            3,000,000                  2,900,000

            DM cost per centimeter                               $1.60                          $1.90

            Manufacturing process capacity               3,750,000                  3,500,000

            Conversion costs*                                       $18,050,000              $17,225,000

            Conversion cost per unit of capacity        $4.28                          $4.35

* Conversion cost = labor and manufacturing overhead.

Complete the following statement to calculate Operating income for each year:

                                                  2016                            2017

Revenues

DM Cost

Conversion Cost

Total Cost

Operating Income

Change in Operating Income

. 1. What strategy did Trinity employ in 2017?

            A. Cost leadership                         B. Balanced scorecard

            C. Product differentiation              D. Trial-and–error

2. Was the strategy employed successful?

                        Yes                                         No

3. What factors above lead you to the conclusions in questions 1 & 2?

Answer 1