2021 2022 1. Units of work performed 80 2. Selling price $ 47,000 $ 45,200 Revenue...

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2021 2022 1. Units of work performed 80 2. Selling price $ 47,000 $ 45,200 Revenue effect of growth 3. Software implementation labour-hours 28,500 30,000 Cost effect of growth Haller Corporation is a small information systems consulting firm that specializes in helping companies implement sales management software. The market for Haller's products is very competitive. To compete, Haller must deliver quality service at a low cost. Haller bills clients in terms of units of work performed, which depends on the size and complexity of the sales management system. Haller presents the following data for the years 2021 and 2022. The company has chosen a cost leadership strategy. The growth, price- recovery, and productivity components of the change in operating income 95 from 2021 to 2022 are as follows: Suppose that during 2022 the market for implementing sales management software increased by 5%, and that Haller experiences a 2% decline in prices. Assume that any further decreases in selling prices and increases in market share are strategic choices by Haller's management to implement Haller's cost leadership strategy. $ 705,000 F 331,328 U 4. Cost per software implementation labour-hour $ 5. Software implementation support capacity (units of work) 62 $ 120 63 $ 373,672 Change in operating income due to growth F 120 6. Total cost of software implementation support $ 468,000 $ 480,000 Revenue effect of price-recovery $ 7. Software implementation support capacity cost per unit of work $ 3,900 $ 4,000 Cost effect of price-recovery 171,000 59,344 U U 8. Number of employees doing software development 3 3 230,344 Change in operating income due to price-recovery U 9. Total software development costs 405,000 $ 418,500 242 172 Required Calculate how much of the change in operating income between 2021 and 2022 is due to industry market-size factors, cost leadership, and product differentiation. How successful has Haller been in implementing its strategy? Begin by selecting the formula you will use. Then, enter the amounts and calculate the change in operating income due to industry market-size factors. Determine whether the amount has a favourable effect on operating income or unfavourable effect. (Hold all decimals in interim calculations. Round your final answer to the nearest whole number. Label the component as favourable "F" or unfavourable "U".) x( x( Change in operating income )= due to industry market size Before calculating the change in operating income due to product differentiation, you must calculate the growth in market share due to product differentiation. Begin by a favourable effect or an unfavourable effect on operating income. (Round your final answer to the nearest whole number. Label the component as favourable "F" or unfavourable "U".) selecting the formula you will use. Then, enter the amounts and calculate the growth in market share due to product differentiation. Determine whether the amount has Before calculating the change in operating income due to cost leadership, you must calculate the growth in market share due to productivity improvement and the strategic decision to reduce the selling price. Begin by selecting the formula you will use. Then, enter the amounts and calculate the growth in market share due to the reduction in the selling price. Determine whether the amount has a favourable effect or an unfavourable effect on operating income. (Hold all decimals in interim calculations. Round your final answer to the nearest whole number. Label the component as favourable "F" or unfavourable "U".) x ( Growth in market share due to reduction in selling price Now, determine the change in operating income due to cost leadership. Determine whether the amount has a favourable effect or an unfavourable effect on operating income. (Label each component as favourable "F" or unfavourable "U".) % x % x Change in operating income = due to a decline in selling price Now, calculate the change in operating income due to product differentiation. Label each component as to whether the amount has a favourable effect or an unfavourable effect on operating income. (Label each component as favourable "F" or unfavourable "U".) Growth in market share due to product differentiation Change in operating income due to product differentiation Change in operating income due to cost leadership How successful has Haller been in implementing its strategy? Haller successful in implementing its cost leadership strategy. Haller was unable to pass along increases in labour costs, due to the decrease in selling price of $. However, Haller was able to take advantage of gains to reduce price, gain market share, and increase operating income. 2021 2022 1. Units of work performed 80 2. Selling price $ 47,000 $ 45,200 Revenue effect of growth 3. Software implementation labour-hours 28,500 30,000 Cost effect of growth Haller Corporation is a small information systems consulting firm that specializes in helping companies implement sales management software. The market for Haller's products is very competitive. To compete, Haller must deliver quality service at a low cost. Haller bills clients in terms of units of work performed, which depends on the size and complexity of the sales management system. Haller presents the following data for the years 2021 and 2022. The company has chosen a cost leadership strategy. The growth, price- recovery, and productivity components of the change in operating income 95 from 2021 to 2022 are as follows: Suppose that during 2022 the market for implementing sales management software increased by 5%, and that Haller experiences a 2% decline in prices. Assume that any further decreases in selling prices and increases in market share are strategic choices by Haller's management to implement Haller's cost leadership strategy. $ 705,000 F 331,328 U 4. Cost per software implementation labour-hour $ 5. Software implementation support capacity (units of work) 62 $ 120 63 $ 373,672 Change in operating income due to growth F 120 6. Total cost of software implementation support $ 468,000 $ 480,000 Revenue effect of price-recovery $ 7. Software implementation support capacity cost per unit of work $ 3,900 $ 4,000 Cost effect of price-recovery 171,000 59,344 U U 8. Number of employees doing software development 3 3 230,344 Change in operating income due to price-recovery U 9. Total software development costs 405,000 $ 418,500 242 172 Required Calculate how much of the change in operating income between 2021 and 2022 is due to industry market-size factors, cost leadership, and product differentiation. How successful has Haller been in implementing its strategy? Begin by selecting the formula you will use. Then, enter the amounts and calculate the change in operating income due to industry market-size factors. Determine whether the amount has a favourable effect on operating income or unfavourable effect. (Hold all decimals in interim calculations. Round your final answer to the nearest whole number. Label the component as favourable "F" or unfavourable "U".) x( x( Change in operating income )= due to industry market size Before calculating the change in operating income due to product differentiation, you must calculate the growth in market share due to product differentiation. Begin by a favourable effect or an unfavourable effect on operating income. (Round your final answer to the nearest whole number. Label the component as favourable "F" or unfavourable "U".) selecting the formula you will use. Then, enter the amounts and calculate the growth in market share due to product differentiation. Determine whether the amount has Before calculating the change in operating income due to cost leadership, you must calculate the growth in market share due to productivity improvement and the strategic decision to reduce the selling price. Begin by selecting the formula you will use. Then, enter the amounts and calculate the growth in market share due to the reduction in the selling price. Determine whether the amount has a favourable effect or an unfavourable effect on operating income. (Hold all decimals in interim calculations. Round your final answer to the nearest whole number. Label the component as favourable "F" or unfavourable "U".) x ( Growth in market share due to reduction in selling price Now, determine the change in operating income due to cost leadership. Determine whether the amount has a favourable effect or an unfavourable effect on operating income. (Label each component as favourable "F" or unfavourable "U".) % x % x Change in operating income = due to a decline in selling price Now, calculate the change in operating income due to product differentiation. Label each component as to whether the amount has a favourable effect or an unfavourable effect on operating income. (Label each component as favourable "F" or unfavourable "U".) Growth in market share due to product differentiation Change in operating income due to product differentiation Change in operating income due to cost leadership How successful has Haller been in implementing its strategy? Haller successful in implementing its cost leadership strategy. Haller was unable to pass along increases in labour costs, due to the decrease in selling price of $. However, Haller was able to take advantage of gains to reduce price, gain market share, and increase operating income.

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