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Strategic Analysis of Profitability of Ransham Company: Income Statement Amounts in 2014 Revenue and Cost Effects of Growth Component in 2015 Revenue and Cost Effects

Strategic Analysis of Profitability of Ransham Company:

Income

Statement

Amounts

in 2014

Revenue and

Cost Effects

of Growth

Component

in 2015

Revenue and

Cost Effects of

Price-Recovery

Component

in 2015

Cost Effect of

Productivity

Component

in 2015

Income

Statement

Amounts

in 2015

Revenues ($)

34,000

10,000 F

1,000 U

(b)

(e)

Costs

23,500

(a)

500 U

(c)

26,100

Operating income

10,500

5,500 F

1,500 U

2,400 F

(d)

What is the cost effect of the growth component (a)?

What is the revenue effect of the productivity component (b)?

What is the cost effect of the productivity component (c)?

What is the operating income amount for 2015 (d)?

What is the revenue amount for 2015 (e)?

Out of the two basic strategies, Ransham Companys strategy is

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