An Operating Income Analysis of Argon Company Revealed the Following

question 33

Multiple Choice

An operating income analysis of Argon Company revealed the following: $\begin{array}{lr}\text { Operating income for 2014 } & \$ 1,207,000 \\\text { Add growth component } & 102,000 \\\text { Deduct price-recovery component } & (95,000) \\\text { Add productivity component } & 90,000\\\text { Operating income for } 2015&\$1,304,000\end{array}$ Argon's operating income gain is consistent with the ________.

• A) product differentiation strategy
• B) product leadership strategy
• C) cost differentiation strategy
• D) cost leadership strategy

---

Definitions:

Production Possibilities

A curve depicting all maximum output possibilities for two goods, given a set of inputs consisting of resources and other factors.

Opportunity Cost

Forgoing possible gains from alternative paths when one path is chosen.

Farmer

An individual engaged in agriculture, raising living organisms for food or raw materials.

Comparative Advantage

The ability of a party to produce a particular good or service at a lower marginal and opportunity cost than another.