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The XKid manufactures an entry - level hoverboard, HOV - X . Pursuing a cost - leadership strategy, the company has tried to improve quality
The XKid manufactures an entrylevel hoverboard, HOVX Pursuing a costleadership 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 while rework and unit costs of the HOVX have decreased. XKid has reduced manufacturing capacity because capacity is no longer needed to support rework. XKid has also lowered HOVXs selling price to gain market share and unit sales have increased. Information about the current period and last period follows:
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Suppose that during the market for hoverboards increased All increases in market share that is sales increases greater than and decreases in the sellina orice of HOVX are the result of XKid's strategic actions.
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tabletableXKid has calculated the following growth, pricerecovery, and productivitycomponents that explain the change in operating income from to Revenue effect of growth,$Cost effect of growth,,Change in operating income due to growth,sRevenue effect of price recovery,,$Cost effect of price recovery,,Change in operating income due to price recovery,,$Direct material costs,$FConversion costs,,FSelling and customerservice costs,,Change in operating income due to productivity,sF
First, calculate how much of the change in operating income from to is due to the industrymarketsize factor, product differentiation, and input in the cell to the nearest dollar.
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