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Fred McReynolds is the accountant for Y Ltd and conducted the following analysis of the change in operating income between 2018 and 2019: Operating income
Fred McReynolds is the accountant for Y Ltd and conducted the following analysis of the change in operating income between 2018 and 2019:
Operating income for 2018 $4,450,000
Add growth component 70,000
Add price-recovery component 392,000
Deduct productivity component (55,000)
Operating income for 2019 $4,857,000
Required:
Explain whether Y Ltds operating income increase is consistent with the product differentiation or cost leadership strategy?
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