An Operating Profit Analysis of ACT Incorporated Revealed the Following

question 143

Multiple Choice

An operating profit analysis of ACT Incorporated revealed the following:
$$\begin{array} { l r } \text { Operating profit for } 2017 & \$ 500000 \\\text { Add growth component } & 25000 \\\text { Deduct price-recovery component } & ( 15000 ) \\\text { Add productivity component } & 60000 \\\text { Operating profit for } 2018 & \$ 570000\end{array}$$
ACT's operating profit gain is consistent with the:

• A)product differentiation strategy.
• B)cost leadership strategy.
• C)re-engineering strategy.
• D)downsizing strategy.

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Definitions:

Disbursements

Financial payments made by a business, including cash expenditures, payments on debts, or distribution of dividends.

Beginning Balance

The amount of money in a given account at the start of a financial period.

Petty Cash Fund

A small amount of cash kept on hand for making immediate, minor expenditures.

Journal Entries

The recordation of financial transactions in a company's accounting system, typically involving a debit and credit entry.