Refer to the information in Exercise 13· 18.
Required
1. Calculate the change in operating income of Grey Corporation in 2018 and 2019.
2. Calculate the growth, price-recovery, and productivity components of changes in operating income
between 2018 and 2019.
3. Comment on your answer in requirement 2. What do these components indicate?

Data from Exercise 13· 18

Grey Corporation makes a special-purpose 04H machine used in the textile industry. Grey has designed the 04H machine for 2018 to be distinct from its competitors. It has been generally regarded as a superior machine. Grey presents the following data for the years 2018 and 2019.

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2018 2019 1. Units of D4H produced and sold 210 200 $40,000 $42,000 2. Selling price 3. Direct materials (kilograms) 300,000 310,000 4. Direct material cost per kilogram $8.00 $8.50 5. Manufacturing capacity (units of D4H) 250 250 $2,025,000 6. Total conversion costs $2,000,000 7. Conversion cost per unit of capacity 8. Selling and customer-service capacity $8,000 $8,100 100 customers 95 customers $1,000,000 $940,500 9. Total selling and customer-service costs $9,900 10. Selling and customer-service capacity cost per customer $10,000 11. Design staff 12 12 12. Total design costs $1,200,000 $1,212,000 13. Design cost per employee $100,000 $101,000