The Xtoon 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. Xtoon has reduced manufacturing capacity because capacity is no longer needed to support rework. Xtoon has also lowered HOV-X's selling price to gain market share and unit sales have increased Data table 2019 2020 1. Units of HOV-X produced and sold 2. Selling price 3. Direct materials used (kits) 4. Direct material cost per kit 5. Manufacturing capacity in kits processed 6. Total conversion costs 7. Conversion cost per unit of capacity (row 6+ row 5) 8. Selling and customer-service capacity 9. Total selling and customer-service costs 10,000 14,000 S 93 $ 76 11,000 7,000 S S 37 $ 37 24,000 19,000 384,000 $ 304,000 S 16 $ 16 95 customers 95 customers $ 16,150 $ 18,050 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 hoverboard 170 $ 190 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 Xtoon can support, not the actual number of customers it serves. Xtoon has 76 customers in 2019 and 83 customers in 2020. Requirement 1. Calculate operating income of Xtoon for 2019 and 2020. (Use parentheses or a minus sign for a loss) The operating income of Xtoon for 2019 is The operating income of Xtoon for 2020 is Requirement 2. Calculate the growth, price-recovery, and productivity components that explain the change in operating income from 2019 to 2020 (For amounts with a 50 balance, make sure to enter "0" in the appropriate cell Complete all input cells) The revenue effect of growth is The cost effect of growth for direct material costs is The cost effect of growth for fixed costs is Calculate the net change in operating income due to the growth component. Be sure to label the not change as to whether the amount has a favorable (F) effect on operating income or unfavorable (U) effect (For amounts with a 50 balance, make sure to enter "0" in the appropriate coll Complete all input celts) The change in operating income due to growth The revenue effect of price recovery is The cost effect of price recovery for direct matenal costs The cost effect of price-recovery for conversion consis The cost effect of price recovery for selling and customer-service costs Tuparsing income due to the price recovery component. Be sure to label the net change as to whether the amount has a favorable (F) effect on operating income or unfavorable (U) effect The change in operating income due to price-recovery Calculate the productivity component of the change in operating income Begin with the cost effect of productivity for direct maternal costs (For amounts with a 50 balance, make sure to enter "0" in the appropriate cet Completo all input cells) The cost effect of productivity for direct material costs is The cost effect of productivity for conversion costs is The cost effect of productivity for selling and cuntomer service costs is Calculate the net change in operating income due to the productivity component Be sure to label the amount as to whether the amount has a levorable (F) affect on operating income or unfavorable (U) effect The change in operating income due to productivity is Requirement 3. Comment on your answer in requirement 2. What do these components indicate? The analyus of operating income indicates that a significant amount of the while growing sales Xloon Company m operating income resulted from Xoon's strategy The company was able to continue to Calculate the net change in operating income due to the productivity compe The change in operating income due to productivity is Requirement 3. Comment on your answer in requirement 2. What do these The analysis of operating income indicates that a significant amount of the while growing sales Xtoon Company decrease increase in operating income resulted from > e sure to label the amount as to whether the ar ponents indicate? in operating income resulted from Xtoon's cost leadership product differentiation operating income or unfavorable (U) effect strategy The company was able to continue to Time Remaining: 01:35:43 Next e to productivity is charge a premium price cut costs answer in requirement 2. What do these components indicate? dicates that a significant amount of the in operating income resulted from while growing sales Xtoon Company was able to earn additional operating income by improving its productivity was unable to earn additional operating income because it was unable to improve its productivity iny was able to continue to