Analysis of growth, price-recovery, and productivity components (continuation of Exercise 13-16). An analysis of La Quinta’s operating income changes between 2008 and 2009 shows the following:

The industry market size for corrugated boxes did not grow in 2009, input prices did not change, and La Quinta reduced the price of its boxes in line with the market.
REQUIRED 1. Was La Quinta’ gain in operating income in 2009 consistent with the strategy you identified in requirement | of Exercise 13-16?
2. Explain the productivity component. In general, does it represent savings in only variable costs, only fixed costs, or both variable and fixed costs?LO1

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Operating income for 2008 Add growth component Deduct price-recovery component Add productivity component Operating income for 2009 $1,700,000 70,000 (60,000) 140,000 $1,850,000