Question 1

An organization that is using the cost leadership approach would:

Accepted Answer

A) incur costs for innovative R&D 
B) provide products at a higher cost than competitors 
C) focus on productivity through efficiency improvements 
D) bring products to market rapidly 
A) incur costs for innovative R&D 
B) provide products at a higher cost than competitors 
C) focus on productivity through efficiency improvements 
D) bring products to market rapidly

Question 2

Productivity measures the relationship between actual inputs used (both quantities and costs)and standard outputs produced.

Accepted Answer

A) True 
 B)False

Question 3

An organization that is using the product differentiation approach would:

Accepted Answer

A) focus on tight cost control 
B) carefully cultivate their brands 
C) provide products that are similar to competitors 
D) offer products at a lower cost than competitors 
A) focus on tight cost control 
B) carefully cultivate their brands 
C) provide products that are similar to competitors 
D) offer products at a lower cost than competitors

Question 4

Although total factor productivity (TFP)measures are comprehensive, operations personnel find financial TFP measures more difficult to understand and less useful than physical partial productivity measures in performing their tasks.

Accepted Answer

A) True 
 B)False

Question 5

Employee satisfaction is a measure of the internal business perspective of the balanced scorecard.

Accepted Answer

A) True 
 B)False

Question 6

Measures of the balanced scorecard's financial perspective include all of the following EXCEPT:

Accepted Answer

A) operating income 
B) customer satisfaction 
C) gross profit percentage 
D) cost reductions 
A) operating income 
B) customer satisfaction 
C) gross profit percentage 
D) cost reductions

Question 7

Product differentiation is an organization''s ability to achieve lower costs relative to competitors through productivity and efficiency improvements, elimination of waste, and tight cost control.

Accepted Answer

A) True 
 B)False

Question 8

Yield variances:

Accepted Answer

A) reveal the effect of substitution within a single factor of production 
B) address the productivity of a single component of one factor of production 
C) capture both substitutions between factors of production as well as within factors of production 
D) reveal the effect of substitution within multiple factors of production 
A) reveal the effect of substitution within a single factor of production 
B) address the productivity of a single component of one factor of production 
C) capture both substitutions between factors of production as well as within factors of production 
D) reveal the effect of substitution within multiple factors of production

Question 9

Explain the product differentiation and the cost leadership strategies.

Accepted Answer

Product differentiation is an organizati

Question 10

Answer the following questions using the information below:
Meale Company makes a household appliance with model number X500. The goal for 2012 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 X500 units that can be produced. The industry market size for appliances increased 10% from 2011 to 2012. The following additional data are available for 2011 and 2012:
  
-Overall, was Meale's strategy successful in 2012?

Accepted Answer

A) No, because the selling price per unit decreased. 
B) Yes, because operating income increased. 
C) Yes, because less direct materials were used. 
D) No, because more units were produced and sold. 
A) No, because the selling price per unit decreased. 
B) Yes, because operating income increased. 
C) Yes, because less direct materials were used. 
D) No, because more units were produced and sold.

Question 11

What are the four key perspectives in the balanced scorecard?

Accepted Answer

The four key perspectives in the balance

Question 12

The price-recovery component of a change in operating income from one year to the next measures the increase in operating income from selling more units of the product.

Accepted Answer

A) True 
 B)False

Question 13

Answer the following questions using the information below:
Riter Corporation manufactures water toys. It plans to grow by producing high-quality water toys at a low cost that are delivered in a timely manner. There are a number of other manufacturers who produce similar water toys. Riter believes that continuously improving its manufacturing processes and having satisfied employees are critical to implementing its strategy.
-To further company strategy, measures on the balanced scorecard would most likely include:

Accepted Answer

A) number of process improvements 
B) price premium earned 
C) longer cycle times 
D) an increase in operating income from increased profit margins 
A) number of process improvements 
B) price premium earned 
C) longer cycle times 
D) an increase in operating income from increased profit margins

Question 14

Discretionary costs:

Accepted Answer

A) have detailed processes 
B) are physically observable activities 
C) possess a high level of certainty 
D) are usually large total amounts 
A) have detailed processes 
B) are physically observable activities 
C) possess a high level of certainty 
D) are usually large total amounts

Question 15

Measures of the balanced scorecard's customer perspective include all of the following EXCEPT:

Accepted Answer

A) market share 
B) customer satisfaction 
C) number of new customers 
D) customer training on new products 
A) market share 
B) customer satisfaction 
C) number of new customers 
D) customer training on new products

Question 16

A high level of uncertainty is represented in:

Accepted Answer

A) engineered costs 
B) discretionary costs 
C) both engineered and discretionary costs 
D) neither engineered nor discretionary costs 
A) engineered costs 
B) discretionary costs 
C) both engineered and discretionary costs 
D) neither engineered nor discretionary costs

Question 17

Following a strategy of product differentiation, Sting Corporation makes a high-end computer monitor, CM7. Sting Corporation presents the following data for the years 2012 and 2013:
   Sting Corporation produces no defective units but it wants to reduce direct materials usage per unit of CM7 in 2012. Manufacturing conversion costs in each year depend on production capacity defined in terms of CM7 units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Ernsting Corporation has 100 customers in 2012 and 115 customers in 2013. The industry market size for high-end computer monitors increased 5% from 2012 to 2013.
Required:
a. What is the revenue effect of the price-recovery component?
b. What is the cost effect of the price-recovery component?
c. What is the net effect on operating income as a result of the price-recovery component?
d. What is the net effect on operating income as a result of the productivity component?

Accepted Answer

a. ($440 - $400)× 5,500 = $220,000 F
b.

Question 18

Ralph Company has been very aggressive in developing various types of financial and nonfinancial measurement schemes to help with the evaluation of its manufacturing processes. It appears that some of the managers are suboptimizing in that their decision processes are geared solely for their department's benefit, sometimes to the detriment of the organization as a whole.
Required:
What changes in the evaluation system could the company implement to help minimize the suboptimization of the managers' decision-making process?

Accepted Answer

The company could implement a total fact

Question 19

The customer perspective under the balanced scorecard approach would include measures on cost reduction.

Accepted Answer

A) True 
 B)False

Question 20

All of the following relate to the balanced scorecard's learning and growth perspective EXCEPT:

Accepted Answer

A) How do we achieve greater employee satisfaction? 
B) What new products do we create? 
C) How do we provide information systems with updated technology? 
D) How will we motivate and empower our employees? 
A) How do we achieve greater employee satisfaction? 
B) What new products do we create? 
C) How do we provide information systems with updated technology? 
D) How will we motivate and empower our employees?

An organization that is using the cost leadership approach would:

Productivity measures the relationship between actual inputs used (both quantities and costs)and standard outputs produced.

An organization that is using the product differentiation approach would:

Although total factor productivity (TFP)measures are comprehensive, operations personnel find financial TFP measures more difficult to understand and less useful than physical partial productivity measures in performing their tasks.

Employee satisfaction is a measure of the internal business perspective of the balanced scorecard.

Measures of the balanced scorecard's financial perspective include all of the following EXCEPT:

Product differentiation is an organization''s ability to achieve lower costs relative to competitors through productivity and efficiency improvements, elimination of waste, and tight cost control.

Yield variances:

Explain the product differentiation and the cost leadership strategies.

What are the four key perspectives in the balanced scorecard?

The price-recovery component of a change in operating income from one year to the next measures the increase in operating income from selling more units of the product.

Discretionary costs:

Measures of the balanced scorecard's customer perspective include all of the following EXCEPT:

A high level of uncertainty is represented in:

The customer perspective under the balanced scorecard approach would include measures on cost reduction.

All of the following relate to the balanced scorecard's learning and growth perspective EXCEPT:

The Accountants Role in the Organization

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Direct-Cost Variances, and Management Control

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Pricing Decisions and Cost Management

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality, Time, and the Theory of Constraints

Inventory Management, Just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters

Exam 13: Strategy, Balanced Scorecard, and Strategic Profitability Analysis

An organization that is using the cost leadership approach would:

Productivity measures the relationship between actual inputs used (both quantities and costs)and standard outputs produced.

An organization that is using the product differentiation approach would:

Although total factor productivity (TFP)measures are comprehensive, operations personnel find financial TFP measures more difficult to understand and less useful than physical partial productivity measures in performing their tasks.

Employee satisfaction is a measure of the internal business perspective of the balanced scorecard.

Measures of the balanced scorecard's financial perspective include all of the following EXCEPT:

Product differentiation is an organization''s ability to achieve lower costs relative to competitors through productivity and efficiency improvements, elimination of waste, and tight cost control.

Yield variances:

Explain the product differentiation and the cost leadership strategies.

What are the four key perspectives in the balanced scorecard?

The price-recovery component of a change in operating income from one year to the next measures the increase in operating income from selling more units of the product.

Discretionary costs:

Measures of the balanced scorecard's customer perspective include all of the following EXCEPT:

A high level of uncertainty is represented in:

The customer perspective under the balanced scorecard approach would include measures on cost reduction.

All of the following relate to the balanced scorecard's learning and growth perspective EXCEPT:

The Accountants Role in the Organization

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Direct-Cost Variances, and Management Control

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Pricing Decisions and Cost Management

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality, Time, and the Theory of Constraints

Inventory Management, Just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters