Friday, November 4, 2011

An operating income analysis of Deb Schmidt Incorporated revealed the following:

ACCOUNTING

Multiple Choice

An operating income analysis of Deb Schmidt Incorporated revealed the following:



Operating income for 2003 $500,000

Add growth component 15,000

Add price-recovery component 100,000

Deduct productivity component (8,000)

Operating income for 2004 $607,000



Schmidt’s operating income gain is consistent with the

a. product differentiation strategy.

b. downsizing strategy.

c. reengineering strategy.

d. cost leadership strategy.

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