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2. Calculate the growth, price recovery, and productivity components that explain the change in operating income from 2018 to 2019. Show the calculation process, not
2. Calculate the growth, price recovery, and productivity components that explain the change in operating income from 2018 to 2019. Show the calculation process, not the formula, and indicate favorable (F) or unfavorable (U) for the effect of each component on profit. [8 Marks] PART B [4 Marks] Operating profit analysis of Lloyd Ltd revealed the following: Operating profit for 2018 $500,000 Add growth component 25,000 Deduct price recovery component - 15,000 Add productivity component 60,000 Operating profit for 2019 570,000 Lloyd Ltd has implemented its strategy successfully in 2019. Required: Please identify which strategy Lloyd Ltd is implementing. Please comment on the effect of each component on profits to support your answer on strategy. [4 Marks]
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