Refer to Exercise 12-19. Suppose that the market for silk-screened T-shirts grew by 10% during 2013. All increases in sales greater than 10% are the result of Ramiro’s strategic actions.
Calculate the change in operating income from 2012 to 2013 due to growth in market size, product differentiation, and cost leadership. How successful has Ramiro been in implementing its strategy? Explain.

Data From Exercise 12-19:
Refer to Exercise 12-18.

1. Calculate Ramiro‘s operating income in both 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 answers in requirement 2. What does each of these components indicate?

Data From Exercise 12-18:
Ramiro & Sons buys T-shirts in bulk, applies its own trendsetting silk-screen designs, and then sells the T-shirts to a number of retailers. Ramiro wants to be known for its trendsetting designs, and it wants every teenager to be seen in a distinctive Ramiro T-shirt. Ramiro presents the following data for its first two years of operations, 2012 and 2013.

Administrative costs depend on the number of customers Ramiro has created capacity to support, not on the actual number of customers served. Ramiro had 4,300 customers in 2012 and 4,200 customers in 2013.