In operating income strategic analysis, a component which measures the change in operating income attributed to the change in output quantity is classified as ________?
Correct answer: B. growth component
- A. internal process component
- B. growth component
- C. price recovery component
- D. productivity component
Explanation
The growth component measures the operating-income change caused by producing or selling a different quantity of output. Price recovery concerns input and output price changes, while productivity concerns using inputs more efficiently.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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