Required:

1. Calculate Raneiro's operating income in both 2011 and 2012.

2. Calculate the growth, price-recovery, and productivity components that explain the change in operating income from 2011 to 2012.

3. Comment on your answers in requirement 2. What does each of these components indicate?

14-15 Strategy, balanced scorecard, merchandising operation. Raneiro \& Sons buys T-shirts in bulk, applies its own trendsetting silk-screen designs, and then sells the T-shirts to a number of retailers. Raneiro wants to be known for its trendsetting designs, and it wants every teenager to be seen in a distinctive Raneiro T-shirt. Raneiro presents the following data for its first 2 years of operations, 2011 and 2012. Administrative costs depend on the number of customers that Raneiro has created capacity to support, not on the actual number of customers served. Raneiro had 3,900 customers in 2011 and 3,800 customers in 2012