Exam 13: Strategy, Balanced Scorecard, and Profitability Analysis

________ is an organization's ability to offer products or services that are perceived by its customers as being superior and unique relative to those of its competitors.

When implementing a balanced scorecard, one should assume the cause-and-effect linkage to be precise.

Discretionary costs arise from periodic (usually yearly) decisions regarding the maximum amount to be incurred.

The ratio of the quantity of output produced divided by the quantity of a single input used, is called

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. -What is the cost effect of growth component?

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. -What is the revenue effect of price-recovery component?

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 feature of a good balanced scorecard?

What is reengineering? Can you contrast a reengineering approach to change with a kaizen approach to change?

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. -What is the operating income for year 1?

Engineered costs result specifically from a clear cause-and-effect relationship between output and the resources needed to produce that output.

The growth component measures the increase in revenues minus the increase in costs from selling more units of a product.

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

Use the information below to answer the following question(s). Following a strategy of product differentiation, Instruments Inc. makes a hand held calculator, II400. Instruments Inc. presents the following data for the years 1 and 2 Instruments Inc. produces no defective units but it wants to reduce direct materials usage per unit of II400 in year 2. Manufacturing conversion costs in each year depend on production capacity defined in terms of II400 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. Instruments Inc. has 23 customers in year 1 and 25 customers in year 2. The industry market size for hand held calculators increased 5% from year 1 to year 2. -Required: a. What amount is the revenue effect of the price-recovery component? b. What amount is the cost effect of the price-recovery component? c. What is the net change in operating income as a result of the price-recovery component?

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

________ translates an organization's mission and strategy into a comprehensive set of performance measures that provides the framework for implementing its strategy.

Buck Corporation plans to grow by offering a computer monitor, the CM3000 that is superior and unique from the competition. Buck believes that putting additional resources into R&D and staying ahead of the competition with technological innovations are critical to implementing its strategy. Required: a. Is Buck's strategy one of product differentiation or cost leadership? Explain briefly. Identify at least one key element that you would expect to see included in the balanced scorecard b. for the financial perspective. c. for the customer perspective. d. for the internal business process perspective. e. for the learning and growth perspective.

Surveys of employee satisfaction is a potential measure of the

Ranger Electronics Ltd. manufactures a variety of high quality electronic components. Data from the last three months are presented below: You are the new assistant controller for Ranger and the controller has asked you to review the performance over the last 3 months and write a summary analysis with your recommendations for follow up or further monitoring. In addition, the controller notes that the company, although it has many detailed performance measures, is considering implementing a balanced scorecard and asks you to identify the measures you think would be most appropriate to include in the balanced scorecard. Required: Evaluate the performance of Ranger Electronics over the 3 month period.

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 price-recovery component?

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.