An Analysis of Ruthen Corporation's Operating Income Changes Between 2015

question 164

Essay

An analysis of Ruthen Corporation's operating income changes between 2015 and 2016 show the following:
$\begin{array}{lr}\text { Operating income for } 2015 & \$ 4,750,000 \\\text { Add growth component } & 180,000 \\\text { Ded uct price-recovery component } & (60,000) \\\text { Add productivity component } & 285,000\\\text { Operating income for } 2016&\$5,155,000\end{array}$ Required:
Is Ruthen's operating income gain consistent with the product differentiation or cost leadership strategy? Explain briefly.

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