Artie's Appliances Ltd. (AA) makes waffle irons which are distributed through appliance wholesalers who sell to major retailers throughout Canada. The waffle irons are a popular brand because they are a reliable, low cost purchase.AA presents the following data for the 2019 and 2020.

Units of waffle irons produced and sold

2019 - 200,000

2020- 210,000

Selling price

2019- $16.00

2020-$15.50

Direct materials (kilograms)

2019-100,000

2020-100,800

Direct materials costs per kilogram

2019-$8.00

2020-$7.50

Manufacturing capacity in waffle irons

2019-220,000

2020-220,000

Total manufacturing conversion costs

2019-$1,100,000

2020-$1,003,200

Manufacturing conversion costs (per unit of capacity)

2019- $5.00

2020-$4.56

Selling and customer- service capacity (customers)

2019- 60

2020- 58

Total selling and customer-service costs

2019-$360,000

2020-$362,500

Cost per customer of selling and customer-service capacity

2019-$6,000

2020-$6,250

AA produces no defective units but it wanted to reduce direct materials usage per waffle iron in 2020. Manufacturing conversion costs in each year depend on production capacity defined in terms of waffle irons that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Neither conversion costs nor customer-service costs are affected by changes in actual volume. AA had 46 customers in 2019 and 50 customers in year 2020. The industry market size for small appliances increased 5% from 2019 to year 2020.

A. Calculate the change in operating income as a result of the growth component.

B.Calculate the net increase in operating income as a result of the price-recovery component?

C.Calculate the productivity component of change in operating income.

D. Prove that the sum of the figures calculated in questions 4 to 6 are equal to the change in operating income calculated in part 3.