The Xonic manufactures an entry-level hoverboard, HOV-X. Pursuing a cost-leadership strategy, i (Click the icon to view additional information.) 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 (Click the icon to view operating income for 2019 and 2020.) have decreased. Xonic has reduced manufacturing capacity because capacity is no longer . . . needed to support rework. Xonic has also lowered HOV-X's selling price to gain market share (Click the icon to view the components to explain changes in operating income.) and unit sales have increased. Information about the current period (2020) and last period Suppose that during 2020, the market for hoverboards increased 20%. All increases in (2019) follows: market share (that is, sales increases greater than 20%) and decreases in the selling (Click the icon to view the information for 2020 and 2019.) price of HOV-X are the result of Xonic's strategic actions. Read the requirement.Data table 2019 2020 1. Units of HOV-X produced and sold 10,000 17,000 2. Selling price 97 5 82 3. Direct materials used (kits?) 13,000 7.000 4. Direct material cost per kits 34 5 34 5. Manufacturing capacity in kits processed 24,000 22,000 6. Total conversion costs 600,000 5 550,000 7. Conversion cost per unit of capacity (row 6 : row 5) 25 5 25 8. Selling and customer-service capacity 95 customers 95 customers 9. Total selling and customer-service costs 17,100 S 19,000 10. Selling and customer-service capacity per customer (row 9 : row 8) $ 180 5 200 A kit is composed of all the major components needed to produce a hoverboard.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 Xonic can support, not the actual number of customers it serves. Xonic has 79 customers in 2019 and 84 customers in 2020.Reference 2019 2020 Revenues 970,000 $ 1,394,000 Costs Direct material costs 442,000 238,000 Manufacturing conversion costs 600,000 550,000 Selling and customer service costs 17,100 19,000 Total costs 1,059, 100 807,000 Operating income (89,100) 587,000Reference Xonic 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 679,000 TI Cost effect of growth 309,400 U 369,600 Change in operating income due to growth F Revenue effect of price recovery $ 255,000 U Cost effect of price recovery 1,900 C 256,900 Change in operating income due to price recovery U Direct material costs $ 513,400 F Conversion costs 50,000 F Selling and customer-service costs 0 563,400 Change in operating income due to productivity FRequirement 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. How does this relate to Xonic's strategy and its success in implementation? Explain.correct? 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 563400 F Change due to product differentiation 255000 Change due to cost leadership 264214 F 572614 Change in operating income F How does this relate to Xonic's strategy and its success in implementation? Explain. Xonic has been successful in implementing its cost leadership strategy. The increase in operating income during 2020 was due to quality improvements and sales growth It cut its prices to gain market share that might also benefit it in future periods. Xonic's change in operating income in 2020 was also helped by a growth in the overall market size