Question 1

When analyzing the change in operating income, the strategy component of productivity will increase when:

Accepted Answer

A) capacity is reduced 
B) quality is enhanced 
C) selling prices are increased 
D) more units are produced and sold 
A) capacity is reduced 
B) quality is enhanced 
C) selling prices are increased 
D) more units are produced and sold

Question 2

Successful reengineering involves:

Accepted Answer

A) cutting across functional lines to focus on the entire business process 
B) redefining the roles and responsibilities of employees 
C) using information technology 
D) All of these answers are correct. 
A) cutting across functional lines to focus on the entire business process 
B) redefining the roles and responsibilities of employees 
C) using information technology 
D) All of these answers are correct.

Question 3

Which of the following is NOT true of the balanced scorecard?

Accepted Answer

A) Different strategies call for different scorecards. 
B) Successful implementation requires commitment and leadership from top management. 
C) Only objective measures should be used and subjective measures should be avoided. 
D) Cause-and-effect linkages may not be precise and should evolve over time. 
A) Different strategies call for different scorecards. 
B) Successful implementation requires commitment and leadership from top management. 
C) Only objective measures should be used and subjective measures should be avoided. 
D) Cause-and-effect linkages may not be precise and should evolve over time.

Question 4

Which component of strategy measures the reduction in costs attributable to a reduction in the quantity of inputs used in Year 2 relative to the quantity of inputs that would have been used in Year 1 to produce the Year 2 output?

Accepted Answer

A) the growth component 
B) the price-recovery component 
C) the productivity component 
D) the cost leadership component 
A) the growth component 
B) the price-recovery component 
C) the productivity component 
D) the cost leadership component

Question 5

Identify the best description of the balanced scorecard's financial perspective. To achieve our firm's vision and strategy:

Accepted Answer

A) how can we obtain greater profits for the current year? 
B) how can we increase shareholder value? 
C) how will we obtain continuous improvements? 
D) how can we secure greater customer satisfaction? 
A) how can we obtain greater profits for the current year? 
B) how can we increase shareholder value? 
C) how will we obtain continuous improvements? 
D) how can we secure greater customer satisfaction?

Question 6

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:
  
-Which strategy is Meale's Corporation pursuing?

Accepted Answer

A) Product differentiation, because the units produced and sold increased. 
B) Product differentiation, because total conversion costs decreased. 
C) Cost leadership, because direct material costs per square foot increased. 
D) Cost leadership, because the selling price decreased. 
A) Product differentiation, because the units produced and sold increased. 
B) Product differentiation, because total conversion costs decreased. 
C) Cost leadership, because direct material costs per square foot increased. 
D) Cost leadership, because the selling price decreased.

Question 7

Answer the following questions using the information below:
Wingard Company makes a household appliance with model number X200. 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 X200 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 Wingard's strategy successful for 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 8

The customer perspective of the balanced scorecard evaluates the profitability of the strategy.

Accepted Answer

A) True 
 B)False

Question 9

Successful implementation of a product differentiation strategy will result in:

Accepted Answer

A) a large favorable growth and price-recovery components 
B) a large favorable price-recovery and productivity components 
C) a large favorable productivity and growth components 
D) only a large favorable growth component 
A) a large favorable growth and price-recovery components 
B) a large favorable price-recovery and productivity components 
C) a large favorable productivity and growth components 
D) only a large favorable growth component

Question 10

Michael Company provided the following information:   What is the partial productivity ratio?

Accepted Answer

A) 0.97 units per gallon 
B) 1.02 units per gallon 
C) 1.06 units per gallon 
D) 1.12 units per gallon 
A) 0.97 units per gallon 
B) 1.02 units per gallon 
C) 1.06 units per gallon 
D) 1.12 units per gallon

Question 11

In general, profit potential increases with greater competition, stronger potential entrants, products that are similar, and tougher customers and suppliers.

Accepted Answer

A) True 
 B)False

Question 12

Can a company identify unused capacity and, if so, how can unused capacity be managed?

Accepted Answer

It is relatively easy for a company to r

Question 13

To evaluate the success of its strategy, a company can subdivide the change in operating income into growth, price-recovery, and productivity components.

Accepted Answer

A) True 
 B)False

Question 14

To effectively deal with unused capacity a company:

Accepted Answer

A) may downsize 
B) may retain some unused capacity for future growth 
C) should consider it a waste of resources and eliminate all unused capacity 
D) Both A and B are correct. 
A) may downsize 
B) may retain some unused capacity for future growth 
C) should consider it a waste of resources and eliminate all unused capacity 
D) Both A and B are correct.

Question 15

Answer the following questions using the information below:
Merrill Company makes a household appliance with model number X800. 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 X800 units that can be produced. The industry market size for appliances increased 5% from 2011 to 2012. The following additional data are available for 2011 and 2012:
  
-What is the revenue effect of the growth component?

Accepted Answer

A) $2,500 U 
B) $52,500 U 
C) $47,500 F 
D) $50,000 F 
A) $2,500 U 
B) $52,500 U 
C) $47,500 F 
D) $50,000 F

Question 16

Answer the following questions using the information below:
Following a strategy of product differentiation, Loftus Company makes a high-end Appliance, AP15. Loftus Company presents the following data for the years 2011 and 2012:
   Loftus Company produces no defective units but it wants to reduce direct materials usage per unit of AP15 in 2012. Manufacturing conversion costs in each year depend on production capacity defined in terms of AP15 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. Loftus Company has 46 customers in 2011 and 50 customers in 2012. The industry market size for high-end appliances increased 5% from 2011 to 2012.
-What is the net effect on operating income as a result of the growth component?

Accepted Answer

A) $60,000 U 
B) $140,000 F 
C) $60,000 F 
D) $200,000 F 
A) $60,000 U 
B) $140,000 F 
C) $60,000 F 
D) $200,000 F

Question 17

The price-recovery component measures the increase in operating income from selling more units of a product.

Accepted Answer

A) True 
 B)False

Question 18

Answer the following questions using the information below:
Following a strategy of product differentiation, Loftus Company makes a high-end Appliance, AP15. Loftus Company presents the following data for the years 2011 and 2012:
   Loftus Company produces no defective units but it wants to reduce direct materials usage per unit of AP15 in 2012. Manufacturing conversion costs in each year depend on production capacity defined in terms of AP15 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. Loftus Company has 46 customers in 2011 and 50 customers in 2012. The industry market size for high-end appliances increased 5% from 2011 to 2012.
-What is the net effect on operating income as a result of the productivity component?

Accepted Answer

A) $179,000 F 
B) $45,500 F 
C) $241,000 U 
D) $420,000 F 
A) $179,000 F 
B) $45,500 F 
C) $241,000 U 
D) $420,000 F

Question 19

The internal business processes perspective of the balanced scorecard comprises three subprocesses that address all of the following EXCEPT:

Accepted Answer

A) innovative processes used to create new products, services, and processes 
B) motivating current employees 
C) providing service and support to the customer after the sale 
D) delivering existing products and services to best meet the needs of customers 
A) innovative processes used to create new products, services, and processes 
B) motivating current employees 
C) providing service and support to the customer after the sale 
D) delivering existing products and services to best meet the needs of customers

Question 20

Reengineering benefits are most significant when they focus on one business function rather than crossing functional lines of the business process.

Accepted Answer

A) True 
 B)False

When analyzing the change in operating income, the strategy component of productivity will increase when:

Successful reengineering involves:

Which of the following is NOT true of the balanced scorecard?

Which component of strategy measures the reduction in costs attributable to a reduction in the quantity of inputs used in Year 2 relative to the quantity of inputs that would have been used in Year 1 to produce the Year 2 output?

Identify the best description of the balanced scorecard's financial perspective. To achieve our firm's vision and strategy:

The customer perspective of the balanced scorecard evaluates the profitability of the strategy.

Successful implementation of a product differentiation strategy will result in:

Michael Company provided the following information: What is the partial productivity ratio?

In general, profit potential increases with greater competition, stronger potential entrants, products that are similar, and tougher customers and suppliers.

Can a company identify unused capacity and, if so, how can unused capacity be managed?

To evaluate the success of its strategy, a company can subdivide the change in operating income into growth, price-recovery, and productivity components.

To effectively deal with unused capacity a company:

The price-recovery component measures the increase in operating income from selling more units of a product.

The internal business processes perspective of the balanced scorecard comprises three subprocesses that address all of the following EXCEPT:

Reengineering benefits are most significant when they focus on one business function rather than crossing functional lines of the business process.

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

When analyzing the change in operating income, the strategy component of productivity will increase when:

Successful reengineering involves:

Which of the following is NOT true of the balanced scorecard?

Which component of strategy measures the reduction in costs attributable to a reduction in the quantity of inputs used in Year 2 relative to the quantity of inputs that would have been used in Year 1 to produce the Year 2 output?

Identify the best description of the balanced scorecard's financial perspective. To achieve our firm's vision and strategy:

The customer perspective of the balanced scorecard evaluates the profitability of the strategy.

Successful implementation of a product differentiation strategy will result in:

Michael Company provided the following information: What is the partial productivity ratio?

In general, profit potential increases with greater competition, stronger potential entrants, products that are similar, and tougher customers and suppliers.

Can a company identify unused capacity and, if so, how can unused capacity be managed?

To evaluate the success of its strategy, a company can subdivide the change in operating income into growth, price-recovery, and productivity components.

To effectively deal with unused capacity a company:

The price-recovery component measures the increase in operating income from selling more units of a product.

The internal business processes perspective of the balanced scorecard comprises three subprocesses that address all of the following EXCEPT:

Reengineering benefits are most significant when they focus on one business function rather than crossing functional lines of the business process.

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