Analysis of growth, price$-$recovery, and productivity components $($continuation of Exercise

$14-16),$ An analysis of La Flamme$$s operating income changes between $2021$ and $2022$ shows the

following:

Operating income for $2021$ $$1,700,000$

Add growth component $80,000$

Deduct price$-$recovery component $(60,000)$

Add productivity component $180,000$

Operating income for $2022$ $$1,900,000$

The industry market size for corrugated boxes did not grow in $2022,$ input prices did not change, and La

Flamme reduced the price of its boxes in line with the market.

Required

$1.$ Was La Flamme$$s gain in operating income in $2022$ consistenwitt h the strategy you identified in requirement

$1$ of Exercise $14-16?$

$2.$ Explain the productivity component. In general, does it represent savings in only variable costs, only

fixed costs, or both variable and fixed costs?