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James Matthews is the accountant for X Ltd, who conducted the following analysis regarding changes...

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Accounting

James Matthews is the accountant for X Ltd, who conducted the following analysis regarding changes in operating income between the years 2018 and 2019:

Operating income for 2018 $4,250,000

Add growth component 190,000

Deduct price-recovery component (55,000)

Add productivity component 265,000

Operating income for 2019 $4,650,000

Required:

Explain whether X Ltds operating income increase is consistent with the product differentiation or the cost leadership strategy?

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