An analysis of Pineway's operating-income changes between 2016 and 2017 shows the following: (Click the icon to view the information.) The industry market size for electric motors did not grow in 2017, input prices did not change, and Pineway reduced the prices of its motors. Read the requirements. Requirement 1. Was Pineway's gain in operating income in 2017 consistent with a cost leadership strategy? Pineway's operating income gain is consistent with a cost leadership strategy. The increase in operating income in 2017 was driven by the $145,000 gain in productivity in 2017. Pineway took advantage of this driving factor to reduce the prices of its motors and to fuel growth. It increased market share by growing even though the total market size was unchanged. Requirement 2. Explain the productivity component. In general, does it represent savings in only variable costs, only fixed costs, or both variable and fixed costs? Select the correct definition for the productivity component: O A. It measures the change in costs attributable to a change in the quantity and mix of inputs used in a year relative to the quantity and mix of inputs that would have been used in a previous year to produce the current year output. It measures the amount by which operating income increases and costs decrease through the productive use of input quantities. OB. It measures the change in operating income attributable solely to changes in the prices of inputs and outputs between the previous year and the current year. It measures the change in output price compared with changes in input prices OC. It measures the change in operating income attributable solely to the change in the quantity of output sold between the previous year and the current year. The productivity component represents savings in both variable costs and fixed costs With respect to variable costs, productivity improvements immediately translate into cost savings. In the case of fixed costs, productivity gains result only if management takes actions to reduce unused capacity. lial to calon uur onnan 1. Was Pineway's gain in operating income in 2017 consistent with a cost leadership strategy? rating income gain is consistent with a cost leadership strategy. The increase in operating income in 2017 was driven by the $145,000 gain in productivity in 2017. Pineway took advantag otors and to fuel growth. It increased market share by growing even though the total market size was unch 1 Data Table 2. Explain the productivity component In general does it represent savings in only variable costs only fixed d rect definitio Requirements $ year to product sures the ch res the amo sures the ch sures the ch Operating income for 2016 Add growth component Deduct price-recovery component 1,500,000 91,000 (82,000) 145,000 1. Was Pineway's gain in operating income in 2017 consistent with a cost leadership strategy? 2. Explain the productivity component. In general, does it represent savings in only variable costs, only fixed costs, or both variable and fixed costs? butput price com we ent Add productivity component ty componer $ 1,654,000 Operating income for 2017 variable co Print [Done Print Done actions to redu Print Done your answer. An analysis of Pineway's operating-income changes between 2016 and 2017 shows the following: (Click the icon to view the information.) The industry market size for electric motors did not grow in 2017, input prices did not change, and Pineway reduced the prices of its motors. Read the requirements. Requirement 1. Was Pineway's gain in operating income in 2017 consistent with a cost leadership strategy? Pineway's operating income gain is consistent with a cost leadership strategy. The increase in operating income in 2017 was driven by the $145,000 gain in productivity in 2017. Pineway took advantage of this driving factor to reduce the prices of its motors and to fuel growth. It increased market share by growing even though the total market size was unchanged. Requirement 2. Explain the productivity component. In general, does it represent savings in only variable costs, only fixed costs, or both variable and fixed costs? Select the correct definition for the productivity component: O A. It measures the change in costs attributable to a change in the quantity and mix of inputs used in a year relative to the quantity and mix of inputs that would have been used in a previous year to produce the current year output. It measures the amount by which operating income increases and costs decrease through the productive use of input quantities. OB. It measures the change in operating income attributable solely to changes in the prices of inputs and outputs between the previous year and the current year. It measures the change in output price compared with changes in input prices OC. It measures the change in operating income attributable solely to the change in the quantity of output sold between the previous year and the current year. The productivity component represents savings in both variable costs and fixed costs With respect to variable costs, productivity improvements immediately translate into cost savings. In the case of fixed costs, productivity gains result only if management takes actions to reduce unused capacity. lial to calon uur onnan 1. Was Pineway's gain in operating income in 2017 consistent with a cost leadership strategy? rating income gain is consistent with a cost leadership strategy. The increase in operating income in 2017 was driven by the $145,000 gain in productivity in 2017. Pineway took advantag otors and to fuel growth. It increased market share by growing even though the total market size was unch 1 Data Table 2. Explain the productivity component In general does it represent savings in only variable costs only fixed d rect definitio Requirements $ year to product sures the ch res the amo sures the ch sures the ch Operating income for 2016 Add growth component Deduct price-recovery component 1,500,000 91,000 (82,000) 145,000 1. Was Pineway's gain in operating income in 2017 consistent with a cost leadership strategy? 2. Explain the productivity component. In general, does it represent savings in only variable costs, only fixed costs, or both variable and fixed costs? butput price com we ent Add productivity component ty componer $ 1,654,000 Operating income for 2017 variable co Print [Done Print Done actions to redu Print Done your