Answer the following questions using the information below:
Following a strategy of product differentiation, Loftus Company makes a high-end Appliance, AP15. Loftus Company presents the following data for the years 2014 and 2015:
Loftus Company produces no defective units but it wants to reduce direct materials usage per unit of AP15 in 2015. Manufacturing conversion costs in each year depend on production capacity defined in terms of AP15 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. Loftus Company has 46 customers in 2014 and 50 customers in 2015. The industry market size for high-end appliances increased 5% from 2014 to 2015.
-What is operating income for 2014?

Question

Answer the following questions using the information below:
Following a strategy of product differentiation, Loftus Company makes a high-end Appliance, AP15. Loftus Company presents the following data for the years 2014 and 2015:
  Loftus Company produces no defective units but it wants to reduce direct materials usage per unit of AP15 in 2015. Manufacturing conversion costs in each year depend on production capacity defined in terms of AP15 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. Loftus Company has 46 customers in 2014 and 50 customers in 2015. The industry market size for high-end appliances increased 5% from 2014 to 2015.
-What is operating income for 2014?

Quizplus · Accepted Answer

Operating income is typically calculated as total revenue minus operating expenses. The correct answer would be based on the financial data provided, which is not included in the question. However, based on the options, $1,440,000 is likely the correct operating income for 2014.

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