Exam 13: Strategy, Balanced Scorecard, and Profitability Analysis

A disadvantage of total factor productivity over partial productivity is that

Vinetta Ltd. provided the following information: What is the partial productivity ratio?

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 growth component?

External business process perspective focuses on internal operations that further both the customer perspective by creating value for customers and the financial perspective by increasing shareholder wealth.

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 price-recovery component?

What is the direct manufacturing labour partial productivity, assuming 20,000 widgets were produced during the year and 80,000 direct manufacturing labour-hours were used?

Successful reengineering efforts generally involve changing the roles and responsibilities of employees.

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. -Which of the following is a measure of the customer perspective?

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 labour for each year? c. Did each area improve between year 1 and year 2? Explain. d. What will be the projected direct material and labour needs for year 3 if remote control units increase by 6,000 units, assuming Power Company applies the constant returns to scale technology?

Germaine Company provided the following information. What is the partial productivity ratio?

Use the information below to answer the following question(s). Following a strategy of product differentiation, Ernsting Ltd. makes high quality electronic components. Ernsting Ltd. presents the following data for the past two years relating to its XJ649 product. Ernsting produces no defective units but it wants to reduce direct materials usage per unit in Year 2 Manufacturing conversion costs in each year depend on production capacity defined in terms of 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. Ernsting has 60 customers in Year 1 and 66 customers in Year 2. The industry market size for the product increased 6% from Year 1 to Year 2. Of the $50 increase in unit selling price, $30 is attributable to a general price increase. -Required: a. What amount is the revenue effect of the growth component? b. What amount is the cost effect of the growth component? c. What is the net effect on operating income as a result of the growth component?

Grader Company manufactures road graders. Because its managers all have engineering backgrounds, it prefers nonfinancial information for its decision-making models. Therefore, it requires that the accountants gather data to assist in the examination of nonfinancial results of operations. The following information relates to the manufacture of a mobile paver. Required: a. What is the partial productivity for direct materials for each year? b. What is the partial productivity for direct manufacturing labour for each year? c. What is the total factor productivity for each year?

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 growth component?

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?

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

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

The lower the inputs for a given set of outputs or the higher the outputs for a given set of inputs, the higher the level of

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 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?

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 internal business perspective?

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: Present the following, a. The change in operating income from cost leadership. b. The change in operating income due to industry wide effects. c. The effect of product differentiation on operating income and a summarization of the change in operating income between Year 1 and Year 2.