Refer to Exercise 12- 26.

In Exercise 12- 26, Southland Corporation is a small information-systems consulting firm that specializes in helping companies implement standard sales-management software. The market for Southland’s services is very competitive. To compete successfully, Southland must deliver quality service at a low cost. Southland presents the following data for 2012 and 2013.

Required
1. Calculate the operating income of Southland Corporation in 2012 and 2013.
2. Calculate the growth, price-recovery, and productivity components that explain the change in operating income from 2012 to 2013.
3. Comment on your answer in requirement 2. What do these componentsindicate?

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2012 2013 1. Number of jobs billed 2. Selling price per job 3. Software-implementation labor-hours 4. Cost per software-implementation labor-hour 5. Software-implementation support capacity (number of jobs it can do) 6. Total cost of software-implementation support 7. Software-implementation support-capacity cost per job (row 6ow5) 40 $45,000 $42,000 25,000 28,000 $58 $60 70 $224,000 $252,000 $3,600 70 3,200