The Xeon manufactures an entry-level hoverboard, HOV-X. Pursuing a cost-leadership strategy, the company has tried to improve quality and reduce costs. As a result of the actions taken over the last year, quality has significantly improved in 2020 while rework and unit costs of the HOV-X have decreased. Xeon has reduced manufacturing capacity because capacity is no longer needed to support rework. Xeon has also lowered HOV-X's selling price to gain market share and unit sales have increased. Information about the current period (2020) and last period (2019) follows: (Click the icon to view the information for 2020 and 2019.) 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 Xeon can support, not the actual number of customers it serves. Xeon has 77 customers in 2019 and 82 customers in 2020. Print Done Reference Revenues 2019 2020 $ 900,000 $ 1,185,000 Costs Direct material costs 145,000 203,000 Manufacturing conversion costs 432,000 360,000 11,400 20,900 Selling and customer service costs 588,400 583,900 Total costs $ 311,600 $ 601,100 Operating income Reference Xeon has calculated the following growth, price-recovery, and productivity components that explain the change in operating income from 2019 to 2020 Revenue effect of growth $ 450,000 F 72,500 Cost effect of growth. U $ 377,500 Change in operating income due to growth F Revenue effect of price recovery $ 165,000 U 9,500 Cost effect of price recovery U Change in operating income due to price recovery $ 174,500 U Direct material costs $ 14,500 F Conversion costs 72,000 F 0 Selling and customer-service costs $ 86,500 Change in operating income due to productivity F First, calculate how much of the change in operating income from 2019 to 2020 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 How does this relate to Xeon's strategy and its success in implementation? Explain Xeon marke successful in implementing its strategy. The in operating income during 2020 was due to nefit it in future periods. Xeon's change in operating income in 2020 was by a growth in the overall market size has been has not been How does this relate to Xeon's strategy and its success in implementation? Explain Xeon successful in implementing its market share that might also benefit it in future perio strategy The come in 2020 was cost leadership product differentiation in operating income during 2020 was due to by a growth in the overall market size. ess in implementation? Explain strategy. The in operating income during 2020 was due to its prices to gain hods. Xeon's change in operating income by a growth in the overall market size decrease increase Time Remaining: 01:2903 Next Explain in operating income during 2020 was due to strategy The operating income in 2020 was by a growth in the overall m a decline in quality and decreased sales quality improvements and sales growth its prices to gain uring 2020 was due to It its prices to gain growth in the overall market size. cut increased How does this relate to Xeon's strategy and its success in implementation? Explain Xeon successful in implementing its strategy The market share that might also benefit it in future periods Xeon's change in operating income in 2020 was in operating income during 2020 was due to by a growth in the overall market size also helped not affected