p) Product Differentiation Strategy

Ratliff Appliances Company makes a household appliance with model number RM16. The goal for 2020 is to reduce direct materials usage per unit. No defective units are currently produced. Manufacturing conversion costs depend on production capacity defined in terms of RM16 units that can be produced. The industry market size for appliances increased 10% from 2019 to 2020. The following additional data are available for 2019 and 2020:

	2019	2020
Units Produced & Sold	33,000	37,950
Selling Price	$ 360	$ 345
Direct Materials (square feet)	82,500	87,000
Direct Material Costs per square foot	$ 31	$ 33
Manufacturing capacity (units)	41,250	39,850
Total Conversion Costs	$ 866,250	$ 797,000
Conversion Costs per unit of capacity	$ 21	$ 20

Ignoring the market growth, but considering your answer to question (a), how much of Ratliff Cos change in income from 2019 to 2020 is due to a product differentiation strategy?