Following a strategy of product differentiation, Arseniq Company makes a high-end Appliance, XT15. Arseniq presents the following data for the years 2017 and 2018: 2017 2018 Units of XT15 produced and sold 50,000 52,500 Selling price $500 $550 Direct materials (square feet) 150,000 153,750 Direct materials costs per square foot $50 $55 Manufacturing capacity in units of XT15 62,500 62,500 Total conversion costs $6,250,000 $6,875,000 Conversion costs per unit of capacity $100 $110 Selling and customer-service capacity (customers) 150 150 Total selling and customer-service costs $2,250,000 $2,343,750 Selling and customer-service capacity cost per customer $15,000 $15,625 Arsenig produces no defective units but it wants to reduce direct materials usage per unit of XT15. Manufacturing conversion costs in each year depend on production capacity defined in terms of XT15 units 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. Arseniq had 140 customers in 2017 and 145 customers in 2018 Required: 1. What is the revenue effect of the price-recovery component? What is the cost effect of the price-recovery component? 2