Answer the Following Questions Using the Information Below

Multiple Choice

Answer the following questions using the information below:
Meale Company makes a household appliance with model number X500. The goal for 2012 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 X500 units that can be produced. The industry market size for appliances increased 10% from 2011 to 2012. The following additional data are available for 2011 and 2012:

-Which strategy is Meale's Corporation pursuing?

A) Product differentiation, because the units produced and sold increased.
B) Product differentiation, because total conversion costs decreased.
C) Cost leadership, because direct material costs per square foot increased.
D) Cost leadership, because the selling price decreased.