1. Draw a simple customer preference map for Music Master and Vantage using the attributes of price, quality, and storage capacity. Use the format of Exhibit 13-1.

2. Is Music Masters current strategy that of product differentiation or cost leadership?

3. Calculate operating income of Music Master Company for 2019 and 2020.

4. Calculate the growth, price-recovery, and productivity components that explain the change in operating income from 2019 to 2020.

5. Comment on your answer in requirement 2. What do these components indicate?

Music Master Company manufactures an MP3 player called the Mini. The company sells the player to discount stores throughout the country. This player is significantly less expensive than similar products sold by Music Master's competitors, but the Mini offers just four gigabytes of space, compared with eight offered by competitor Vantage Manufacturing. Furthermore, the Mini has experienced production problems that have resulted in significant rework costs. Vantage's model has an excellent reputation for quality, but is considerably more expensive. As a result of the actions taken, quality has significantly improved in 2020 while rework and unit costs of the Mini have decreased. Music Master has reduced manufacturing capacity because capacity is no longer needed to support rework. Music Master has also lowered the Mini's selling price to gain market share and unit sales have increased. Information about the current period (2020) and last period (2019) follows: 2020 1.Units of Mini produced and sold 2.Selling price 3.Ounces of direct materials used 4 Direct material cost per un 5. Manufacturing capacity in unis 5. Totalcorersion costs 7. Conversion cost per unit of capacity frow 6. row 5 3. Seling and customer service costs Total selling and customer Service costs 10. Seling and customer service capacity cont per customer (row 9. row B) 2015 8.00 9,000 $45 $43 32.000 33,000 $3.50 $3.00 12.000 11,000 $156.000 $143.000 $13 $131 20 customers customers 345.000 $49,500 $500 $550 Conversion costs in each year depend on production capacity defined in terms of units of Mini that can be produced, not the actual units produced. Selling and customer-service costs depend on the number of customers that Music Master can support, not the actual number of customers it serves. Music Master has 70 customers in 2010 and 80 customers in 2011. 1. Draw a simple customer preference map for Music Master and Vantage using the attributes of price, quality, and storage capacity. Use the format of Exhibit 13-1 2. Is Music Master's current strategy that of product differentiation or cost leadership? 3. Calculate operating income of Music Master Company for 2019 and 2020. 4. Calculate the growth, price-recovery, and productivity components that explain the change in operating income from 2019 to 2020. 5. Comment on your answer in requirement 2. What do these components indicate? Music Master Company manufactures an MP3 player called the Mini. The company sells the player to discount stores throughout the country. This player is significantly less expensive than similar products sold by Music Master's competitors, but the Mini offers just four gigabytes of space, compared with eight offered by competitor Vantage Manufacturing. Furthermore, the Mini has experienced production problems that have resulted in significant rework costs. Vantage's model has an excellent reputation for quality, but is considerably more expensive. As a result of the actions taken, quality has significantly improved in 2020 while rework and unit costs of the Mini have decreased. Music Master has reduced manufacturing capacity because capacity is no longer needed to support rework. Music Master has also lowered the Mini's selling price to gain market share and unit sales have increased. Information about the current period (2020) and last period (2019) follows: 2020 1.Units of Mini produced and sold 2.Selling price 3.Ounces of direct materials used 4 Direct material cost per un 5. Manufacturing capacity in unis 5. Totalcorersion costs 7. Conversion cost per unit of capacity frow 6. row 5 3. Seling and customer service costs Total selling and customer Service costs 10. Seling and customer service capacity cont per customer (row 9. row B) 2015 8.00 9,000 $45 $43 32.000 33,000 $3.50 $3.00 12.000 11,000 $156.000 $143.000 $13 $131 20 customers customers 345.000 $49,500 $500 $550 Conversion costs in each year depend on production capacity defined in terms of units of Mini that can be produced, not the actual units produced. Selling and customer-service costs depend on the number of customers that Music Master can support, not the actual number of customers it serves. Music Master has 70 customers in 2010 and 80 customers in 2011. 1. Draw a simple customer preference map for Music Master and Vantage using the attributes of price, quality, and storage capacity. Use the format of Exhibit 13-1 2. Is Music Master's current strategy that of product differentiation or cost leadership? 3. Calculate operating income of Music Master Company for 2019 and 2020. 4. Calculate the growth, price-recovery, and productivity components that explain the change in operating income from 2019 to 2020. 5. Comment on your answer in requirement 2. What do these components indicate