Exam 13: Strategy, Balanced Scorecard, and Profitability Analysis

________ is the fundamental rethinking and redesign of business processes to achieve improvements in critical measures of performance such as cost, quality, service, speed, and customer satisfaction.

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Question 1

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Wondergardens Ltd. operates amusement parks similar to those such as Six Flags, Universal Studios, Disneyland etc. Wondergardens' mission is to provide high quality family entertainment that exceed guests' expectations and will create lifelong memories. To achieve this goal, Wondergardens strives to provide safe, clean, friendly family environments at reasonable prices. In addition to the amusement parks, the company operates a community outreach program. Through volunteerism, it offers educational and recreational programs (e.g. after school programs for children and teenagers, employment related training for adults) and special events at its facilities. Wondergardens' president, Roland Coaster, has asked you to lead a team of employees in developing a balanced scorecard for its parks. Required: Develop the balanced scorecard for Roland Coaster.

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Question 2

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This is intended to be an open ended question and individual responses should be evaluated on their own merit. A good answer will identify relevant quantifiable performance measures and clearly link these to the mission. Some possible answers include:
Financial Perspective: Any traditional financial measures (such as stock price, profit margins, etc.) may be used since this is a corporation that needs to provide returns to its shareholders. Because the company has established "reasonable prices" as part of its mission, it may measure its admission fees relative to its competitors.
Customer Perspective: Customer satisfaction would be of paramount importance. The company should survey its guests to include measures of satisfaction. Specifically it should question the customers about the cleanliness of its grounds, and its ranking of expectations (i.e. did your recent visit Meet, Exceed, Fall Below expectations?). Surveys would be tabulated and scored and a target set. (i.e. 75% "exceed" rating). The company could also measure number of repeat customers which would suggest that customers enjoyed their experiences.
Internal Business Processes Perspective: Recommended measures might include number of new attractions, average wait time for attractions. New attractions would not only draw in customers but contribute to exceeding expectations and creating memories. Shorter wait times also directly link to customer satisfaction.
Learning & Growth: Since the company is involved in outreach activities, it may wish to measure the percentage of employees who volunteer in these programs. Percentage or number of employees trained is another measure that can be considered.

Total factor productivity (TFP) is the ratio of the quantity of output produced to the costs of all inputs used, where the inputs are combined on the basis of current period prices.

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Question 3

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True

________ has/have been classified in many ways, but what is common is to set the business within its external environment.

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Question 4

Use the information below to answer the following question(s). Following a strategy of product differentiation, Barry Company makes an XX 300. Barry Company presents the following data for the years 1 and 2. Barry Company produces no defective units but it wants to reduce direct materials usage per unit of XX 300 in year 2. Manufacturing conversion costs in each year depend on production capacity defined in terms of XX 300 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. Neither conversion costs or customer-service costs are affected by changes in actual volume. Barry Company has 23 customers in year 1 and 25 customers in year 2. The industry market size for high-end appliances increased 5% from year 1 to year 2. -Which of the following is NOT true of a good balanced scorecard?

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Question 5

Which of the following is not a force that shapes an organization's competitive environment?

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Question 6

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

(True/False)

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Question 7

Use the information below to answer the following question(s). Following a strategy of product differentiation, Luke Company makes a high-end Appliance, AP15. Luke Company presents the following data for the years 1 and 2. Luke Company produces no defective units but it wants to reduce direct materials usage per unit of AP15 in year 2. 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. Neither conversion costs or customer-service costs are affected by changes in actual volume. Luke Company has 46 customers in year 1 and 50 customers in year 2. The industry market size for high-end appliances increased 5% from year 1 to year 2. -What is the revenue effect of growth component?

(Multiple Choice)

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Question 8

An analysis of Gardner Corporation's operating income changes between Year 1 and Year 2 show the following: Required: Is Gardner's operating income gain consistent with the product differentiation or cost leadership strategy? Explain briefly.

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Question 9

Which of the following statements is true concerning productivity measures?

(Multiple Choice)

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Question 10

Use the information below to answer the following question(s). Following a strategy of product differentiation, Despotovich Corporation makes a high-end Computer Monitor, CM12. Despotovich Corporation presents the following data for the years 1 and 2: Despotovich Corporation produces no defective units but it wants to reduce direct materials usage per unit of CM12 in Year 2. Manufacturing conversion costs in each year depend on production capacity defined in terms of CM12 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. Neither conversion costs nor customer-service costs are affected by changes in actual volume. Despotovich Corporation has 46 customers in Year 1 and 50 customers in Year 2 . The industry market size for high-end computer monitors increased 5% from Year 1 to Year 2. Of the $40 increase in unit selling price, $10 was attributable to a general increase in prices. -Required: a. What is the operating income for Year 1? b. What is the operating income in Year 2? c. What is the change in operating income from Year 1 to Year 2?

(Essay)

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Question 11

To achieve a cost leadership strategy companies may need to improve their internal production processes to increase yield.

(True/False)

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Question 12

Use the information below to answer the following question(s). Following a strategy of product differentiation, Luke Company makes a high-end Appliance, AP15. Luke Company presents the following data for the years 1 and 2. Luke Company produces no defective units but it wants to reduce direct materials usage per unit of AP15 in year 2. 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. Neither conversion costs or customer-service costs are affected by changes in actual volume. Luke Company has 46 customers in year 1 and 50 customers in year 2. The industry market size for high-end appliances increased 5% from year 1 to year 2. -What is the net increase in operating income as a result of the price-recovery component?

(Multiple Choice)

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Question 13

Use the information below to answer the following question(s). Following a strategy of product differentiation, Barry Company makes an XX 300. Barry Company presents the following data for the years 1 and 2. Barry Company produces no defective units but it wants to reduce direct materials usage per unit of XX 300 in year 2. Manufacturing conversion costs in each year depend on production capacity defined in terms of XX 300 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. Neither conversion costs or customer-service costs are affected by changes in actual volume. Barry Company has 23 customers in year 1 and 25 customers in year 2. The industry market size for high-end appliances increased 5% from year 1 to year 2. -Which of the following is a measure of the customer perspective?

(Multiple Choice)

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Question 14

Learning and growth perspective identifies the capabilities in which the organization must excel to achieve superior internal processes that create value for customers and shareholders.

(True/False)

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Question 15

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

(Multiple Choice)

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Question 16

The average number of student credit hours taught per faculty member is an example of

(Multiple Choice)

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Question 17

Strategy requires integration of product and process development.

(True/False)

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Question 18

Use the information below to answer the following question(s). Following a strategy of product differentiation, Barry Company makes an XX 300. Barry Company presents the following data for the years 1 and 2. Barry Company produces no defective units but it wants to reduce direct materials usage per unit of XX 300 in year 2. Manufacturing conversion costs in each year depend on production capacity defined in terms of XX 300 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. Neither conversion costs or customer-service costs are affected by changes in actual volume. Barry Company has 23 customers in year 1 and 25 customers in year 2. The industry market size for high-end appliances increased 5% from year 1 to year 2. -The purpose of the balanced scorecard is BEST described as helping an organization

(Multiple Choice)

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Question 19

Use the information below to answer the following question(s). Following a strategy of product differentiation, Luke Company makes a high-end Appliance, AP15. Luke Company presents the following data for the years 1 and 2. Luke Company produces no defective units but it wants to reduce direct materials usage per unit of AP15 in year 2. 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. Neither conversion costs or customer-service costs are affected by changes in actual volume. Luke Company has 46 customers in year 1 and 50 customers in year 2. The industry market size for high-end appliances increased 5% from year 1 to year 2. -What is the change in operating income from year 1 to year 2?

(Multiple Choice)

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Question 20

Showing 1 - 20 of 140

________ is the fundamental rethinking and redesign of business processes to achieve improvements in critical measures of performance such as cost, quality, service, speed, and customer satisfaction.

Total factor productivity (TFP) is the ratio of the quantity of output produced to the costs of all inputs used, where the inputs are combined on the basis of current period prices.

________ has/have been classified in many ways, but what is common is to set the business within its external environment.

Which of the following is not a force that shapes an organization's competitive environment?

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

An analysis of Gardner Corporation's operating income changes between Year 1 and Year 2 show the following: Required: Is Gardner's operating income gain consistent with the product differentiation or cost leadership strategy? Explain briefly.

Which of the following statements is true concerning productivity measures?

To achieve a cost leadership strategy companies may need to improve their internal production processes to increase yield.

Learning and growth perspective identifies the capabilities in which the organization must excel to achieve superior internal processes that create value for customers and shareholders.

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

The average number of student credit hours taught per faculty member is an example of

Strategy requires integration of product and process development.

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets, Variances, and Management Control: I

Flexible Budgets, Variances, and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Quantitative Analyses of Cost Functions

Decision Making and Relevant Information

Pricing Decisions, Product Profitability Decisions, and Cost Management

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Process Costing

Spoilage, Rework, and Scrap

Cost Management: Quality, Time, and the Theory of Constraints

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Capital Budgeting: a Closer Look

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

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