Rouge Wood Inc produces high-quality household appliances. Its management would like to outperform the competitors by...

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Rouge Wood Inc produces high-quality household appliances. Its management would like to outperform the competitors by implementing a product differentiation strategy. The management presents the following data for the years 2020 and 2021. 2020 2021 Units of product produced Selling price 1,000,000 1,255,000 150 180 Direct materials / unit 1,800 2,900 Direct materials cost / unit 15 25 Manufacturing capacity 40,000 40,000 Total manufacturing conversion cost 1,000,000 1,200,000 Manufacturing cost / unit 25 30 Selling and customer-service capacity 15 25 Total selling and customer-service costs Cost/customer of selling 2,500,000 2,800,000 and customer-service capacity 166,667 112,000 Rouge Wood does not produce defective units, but it wants to reduce the usage of direct materials from the prior period. Manufacturing conversion costs in each year depends on production capacity that can be produced. Selling and customer-service costs depend on the number of customers estimated to support. The industry market size for high-end product increased by 15% from the prior period. **Round your calculation to the nearest dollar a) Calculate the change in opiating income and indicate whether it is favorable or unfavorable. b) Calculate the growth components of changes in operating income. c) Calculate the price-recovery components of changes in operating income. d) Calculate the productivity components of changes in operating income. e) Explain whether the business was successful in implementing its strategy. (3 marks) (3 marks) (3 marks) (3 marks) (3 marks) Rouge Wood Inc produces high-quality household appliances. Its management would like to outperform the competitors by implementing a product differentiation strategy. The management presents the following data for the years 2020 and 2021. 2020 2021 Units of product produced Selling price 1,000,000 1,255,000 150 180 Direct materials / unit 1,800 2,900 Direct materials cost / unit 15 25 Manufacturing capacity 40,000 40,000 Total manufacturing conversion cost 1,000,000 1,200,000 Manufacturing cost / unit 25 30 Selling and customer-service capacity 15 25 Total selling and customer-service costs Cost/customer of selling 2,500,000 2,800,000 and customer-service capacity 166,667 112,000 Rouge Wood does not produce defective units, but it wants to reduce the usage of direct materials from the prior period. Manufacturing conversion costs in each year depends on production capacity that can be produced. Selling and customer-service costs depend on the number of customers estimated to support. The industry market size for high-end product increased by 15% from the prior period. **Round your calculation to the nearest dollar a) Calculate the change in opiating income and indicate whether it is favorable or unfavorable. b) Calculate the growth components of changes in operating income. c) Calculate the price-recovery components of changes in operating income. d) Calculate the productivity components of changes in operating income. e) Explain whether the business was successful in implementing its strategy. (3 marks) (3 marks) (3 marks) (3 marks) (3 marks)