Which of the following statements is true of strategic analysis of operating inc

Question

Which of the following statements is true of strategic analysis of operating income? It focuses on differences in individual categories of costs (direct materials, direct manufacturing labor, and overheads). Management accountants compare actual and budgeted operating performance over the same time periods. Change In operating Income from one period to any future period can be subdivided Into product differentiation, cost leadership, and growth components. Subdividing the change in operating income to evaluate the success of a strategy has no similarity to the variants analysis.

Explanation / Answer

Solution:

The answer to the above question is -

C. Change in operating income from one period to any future period can be subdivided into product differentiation, cost leadership, and growth components.

Strategic analysis is performed by comparing changes in the operatiing income, productivity, its growth etc.

Thus, only C. statement holds true for the strategic analysis of operating income.

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