Refer to Exercise 12- 22.

In Exercise 12- 22, Stanmore Corporation makes a special- purpose machine, D4H, used in the textile industry. Stanmore has designed the D4H machine for 2013 to be distinct from its competitors. It has been generally regarded as a superior machine. Stanmore presents the following data for 2012 and 2013.

Required
1. Calculate the operating income of Stanmore 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?

2012 2013 1. Units of D4H produced and sold 2. Selling price 3. Direct materials (kilograms) 4. Direct material cost per kilogram 5. Manufacturing capacity in units of 6. Total conversion costs 7. Conversion cost per unt of capacity (row 6-row5) 8. Selling and customer-service capacity 9. Total selling and customer-service costs 10. Selling and customer-service capacity cost per customer 210 $42,000 310,000 S8.50 250 2,000,000 025,000 $8,100 100 customers 95 customers S1,000,000 40,500 $9,900 200 $40,000 300,000 S8 250 D4H $8,000 $10,000 row9 row 8)