Exam 12: Strategy, Balanced Scorecard, and Strategic Profitability Analysis

The amount of productive capacity available over and above the productive capacity employed to meet customer demand in the current period is the unused capacity.

Terbium Corporation manufactures water toys. It plans to grow by producing high-quality water toys that are delivered in a timely manner. There are a number of other manufacturers who produce similar water toys. Terbium believes that continuously improving its manufacturing processes and reengineering processes to downsize and eliminate excess capacity are critical to implementing its strategy. To further company strategy, measures on the balanced scorecard would most likely include ________.

The revenue effect of growth is calculated by multiplying the difference in units sold (current year minus the previous year) by selling price in the current year.

BarGraphs Corp. had capacity to produce 12,000 units of L3 using 30,000 kg of direct materials. BarGraphs produced 11,650 units of L3 by processing 25,500 kg of direct materials. Conversion cost per unit is $7.50. BarGraphs can add or reduce manufacturing capacity in increments of 4500 kgs. What is the cost of unused capacity for conversion costs of BarGraphs?

BarGraphs Corp. had capacity to produce 4000 units of L3 using 40,000 kg of direct materials. BarGraphs produced 3850 units of L3 by processing 35,500 kg of direct materials. Conversion cost per unit is $7.00. BarGraphs can add or reduce manufacturing capacity in increments of 4500 kgs. What would be the cost savings if BarGraphs decides to reduce manufacturing capacity by 4500 kgs?

In 2016, Smart Office Systems Inc. (SOSI) used 25,840 pounds of plastic (direct materials) to produce 8000 units as opposed to 2017 when SOSI produced 8500 units using 27,840 pounds of plastic. The type of plastic SOSI uses cost $5 per pound in 2016 and rose to $5.25 per pound in 2017. In comparing results for these two years, what would be the cost effect of growth for the plastic material?

Davis Company produced 216,000 sport jackets during 2015 and 540,000 direct manufacturing labor-hours were used at $2 per hour. The conversion costs were $1.20 per jackets produced. What is the direct manufacturing labor partial productivity for Davis Company?

Power Company has been unhappy with the financial accounting variances that its cost accounting system has been producing, because its managers believe that there is more to evaluating an operation than just examining accounting numbers. Therefore, it has started gathering data to assist in the examination of nonfinancial results of operations. The following information relates to the manufacture of remote control units for televisions, radios, and stereo components: Required: a.What is the partial productivity of direct materials for each year? b.What is the partial productivity of direct manufacturing labor for each year? c.Did each area improve between 2016 and 2017? Explain. d.What will be the projected direct material and labor needs for 2013 if remote control units increase by 12,000 units, assuming Power Company applies the constant returns to scale technology?

An effective balanced scorecard helps to communicate the strategy to all members of the organization by translating the strategy into a coherent and linked set of understandable and measurable operational targets.

Which of the following statements is a benefit of measuring environmental and social performance?

Magic Corporation manufactures water toys. It plans to grow by producing high-quality water toys that are delivered in a timely manner. There are a number of other manufacturers who produce similar water toys. Magic believes that continuously improving its manufacturing processes and re-engineering processes to downsize and eliminate excess capacity are critical to implementing its strategy. Which of the following best describes Magic's strategy?

Which of the following statements best relates to the balanced scorecard's learning and growth perspective?

Which of the following is a measure of the balanced scorecard's customer perspective?

The customer perspective of the balanced scorecard focuses on the success of the company in its target market.

Heliem Corp. uses the balanced scorecard technique to achieve its long term objectives. Managers of Heliem came to know that all the balanced scorecards objectives were achieved other than financial perspective measures for the previous period. While the learning and growth and internal business processes perspective measures were achieved with relative ease, Heliem had to strive extremely hard to achieve customer oriented measures. The company had failed miserably in achieving its financial measures. Using the given information, evaluate the strategy of Heliem and its implementation.

Downsizing is an integrated approach of configuring processes, products, and people to match costs to the activities that need to be performed to operate effectively and efficiently in the present and future.

Trusted Products Company makes a household appliance with model number L800. The goal for 2018 is to reduce direct materials usage per unit. No defective units are currently produced. Manufacturing conversion costs depend on production capacity defined in terms of L800 units that can be produced. The industry market size for appliances increased 10% from 2017 to 2018. The following additional data are available for 2017 and 2018: What is the cost effect of the growth component for direct materials?

Jackson Corporation produced 1,000 units of a product in 2017 that required 25,000 pounds of material. The price for the material was $3.00 per pound in 2017 and $3.25 in 2016 . Jackson's cost accountant has estimated that to produce the same 1,000 units in 2016 would have required 29,700 pounds of material. What was the cost effect of productivity for materials?

An analysis of Revere Beach Corporation's operating income changes between 2017 and 2018 show the following: Required: Is Revere's operating income gain consistent with the product differentiation or cost leadership strategy? Explain briefly.

The employee turnover rates is an example of the ________ measure of a balanced-scorecard.