Scott Company manufactures a DVD player called Orlicon. The company sells the player to discount stores throughout the country. i (Click the icon to view additional information.) Information about the current period (2017) and last period (2016) follows. (Click the icon to view the information for 2017 and 2016.) Suppose that during 2017, the market for DVD players grew 10%. All increases in market share (that is, sales increases greater than 10%) and decreases in the selling price of the Orlicon are the result of Scott's strategic actions. i (Click the icon to view additional information.) ... (Click the icon to view operating income for 2016 and 2017.) (Click the icon to view the components to explain changes in operating income.) Read the requirement. First, calculate how much of the change in operating income from 2016 to 2017 is due to the industry-market-size factor, product differentiation, and cost leadership. (Do not round intermediary calculations. Only round the amount you input in the cell to the nearest dollar.) Change due to industry market-size Change due to product differentiation Change due to cost leadership Change in operating income Scott Company manufactures a DVD player called Orlicon. The company sells the player to discount stores throughout the country. More info This player is significantly less expensive than similar products sold by Scott's competitors, but the Orlicon offers just DVD playback, compared with DVD and Blu-ray playback offered by competitor Nomad Manufacturing. Furthermore, the Orlicon has experienced production problems that have resulted in significant rework costs. Nomad's model has an excellent reputation for quality. As a result of the actions taken, quality has significantly improved in 2017 while rework and unit costs of the Orlicon have decreased. Scott has reduced manufacturing capacity because capacity is no longer needed to support rework. Scott has also lowered the Orlicon's selling selling price to gain market share and unit sales have increased. Data table - arket-size factor, pro 2016 2017 1. Units of Orlicon produced and sold 16,000 22,000 2. Selling price $ 95 $ 80 3. Direct materials used (kits*) 20,000 22,000 4. Direct material cost per kit* $ 32 $ 32 5. Manufacturing capacity in kits processed 6. Total conversion costs 28,000 26,000 $ 7. Conversion cost per unit of capacity (row 6+ row 5) $ 560,000 $ 20 $ 520,000 20 8. Selling and customer-service capacity 180 customers 180 customers 9. Total selling and customer-service costs $ 27,000 $ 10. Selling and customer-service capacity per customer (row 9 + row 8) $ * A kit is composed of all the major components needed to produce a DVD player. 150 $ 32,400 180 - Data table Scott has calculated the following growth, price-recovery, and productivity components that explain the change in operating income from 2016 to 2017: Revenue effect of growth $ 570,000 F Cost effect of growth 240,000 U $ 330,000 Change in operating income due to growth F Revenue effect of price recovery Cost effect of price recovery $ 330,000 5,400 U U $ 335,400 Change in operating income due to price recovery U Direct material costs $ 176,000 F Conversion costs 40,000 F 0 Selling and customer-service costs $ 216,000 Change in operating income due to productivity F Print Done - X Suppose that during 2017, the market for DVD players grew 10%. All increases in market share (that is, sales increases greater than 10%) and decreases in the selling price of the Orlicon are the result of Scott's strategic actions. More info Conversion costs in each year depend on production capacity defined in terms of kits that can be processed, not the actual kits started. Selling and customer-service costs depend on the number of customers that Scott can support, not the actual number of customers it serves. Scott has 140 customers in 2016 and 160 customers in 2017. Data table Revenues Print Done 2016 2017 $ 1,520,000 $ 1,760,000 Costs Direct material costs 640,000 704,000 Manufacturing conversion costs 560,000 520,000 Selling and customer service costs 27,000 32,400 Total costs 1,227,000 $ Operating income 293,000 $ 1,256,400 503,600 you input in th