Rebecca Farnum Inc. plans to grow by offering a computer monitor, the CM3000 that is superior and unique from the competition. Rebecca Farnum believes that putting additional resources into R&D and staying ahead of the competition with technological innovations are critical to implementing its strategy. Rebecca Farnum Inc. in following its strategy makes the high-end computer monitor, CM3000 and has presented the following data for the years 2018 and 2019: 2018 2019 Units of CM3000 produced and sold 5,000 5,500 Selling price $400 $440 Direct materials (pounds) 15,000 15,375 Direct materials costs per pound $40 $44 Manufacturing capacity for CM3000 (units) 10,000 10,000 Conversion costs $1,000,000 $1,100,000 Conversion costs per unit of capacity $100 $110 Selling and customer-service capacity (customers) 60 58 Total selling and customer-service costs $360,000 $362,500 Selling and customer-service capacity cost per customer $6,000 $6,250 Rebecca Farnum Inc. produces no defective units but it wants to reduce direct materials usage per unit of CM3000 in 2019. Manufacturing conversion costs in each year depend on production capacity defined in terms of CM3000 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. Rebecca Farnum Inc. has 46 customers in 2018 and 50 customers in 2019. The industry market size for high-end computer monitors increased 5% from 2018 to 2019. Required a) Is Rebecca Farnum Inc. strategy one of product differentiation or cost leadership? Briefly discuss your answer. [3 marks] b) Evaluate the impact on the operating income of the growth, price-recovery and productivity components. [15 marks] c) Critically assess the role of value-chain analysis in strategic cost management. [7 marks