Question 1

An increase of operating profit from one year to the next indicates a company's strategy was successful.

Accepted Answer

A) True 
 B)False

Question 2

Answer the following questions using the information below:
Mitsufugi Company makes a kitchen appliance with model number KA450.The goal for 2018 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 KA450 units that can be produced.The industry market size for appliances increased 5% from 2017 to 2018.The following additional data are available for 2017 and 2018:
 $$\begin{array} { l r r } 
& 2017 & 2018 \
\text { Units of KA450 produced and sold } & 10000 & 10300 \
\text { Selling price } & \$ 150 & \$ 145 \
\text { Direct materials (square metres) } & 30000 & 29000 \
\text { Direct material costs per square metre } & \$ 12 & \$ 13 \
\text { Manufacturing capacity for KA450 (units) } & 12500 & 12000 \
\text { Total conversion costs } & \$ 250000 & \$ 240000 \
\text { Conversion costs per unit of capacity } & \$ 20 & \$ 20
\end{array}$$
-What is the cost effect of the growth component for conversion costs?

Accepted Answer

A) $10 000 U 
B) Zero 
C) $10 000 F 
D) $12 500 U 
A) $10 000 U 
B) Zero 
C) $10 000 F 
D) $12 500 U

Question 3

Tumut Snow Equipment manufactures snow boards.The following information relates to the manufacture of boards in its Bredbo plant:
 $$\begin{array} { l r r } 
& 2017 & 2018 \
\text { Units produced and sold } & 21500 & 26300 \
\text { Direct manufacture labour-hours } & 11000 & 13000 \
\text { Direct materials used (square metres) } & 65000 & 76000 \
\text { Direct manufacture cost per hour } & \$ 16 & \$ 17 \
\text { Direct materials cost per metre } & \$ 10 & \$ 11
\end{array}$$ 
Required:
Prepare an analysis of change in annual costs from 2017 to 2018 including direct materials,direct manufacturing labour and total inputs.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

Direct materials:
2017 input for 2018 ou

Question 4

Answer the following questions using the information below:
Mitsufugi Company makes a kitchen appliance with model number KA450.The goal for 2018 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 KA450 units that can be produced.The industry market size for appliances increased 5% from 2017 to 2018.The following additional data are available for 2017 and 2018:
 $$\begin{array} { l r r } 
& 2017 & 2018 \
\text { Units of KA450 produced and sold } & 10000 & 10300 \
\text { Selling price } & \$ 150 & \$ 145 \
\text { Direct materials (square metres) } & 30000 & 29000 \
\text { Direct material costs per square metres } & \$ 12 & \$ 13 \
\text { Manufacturing capacity for KA450 (units) } & 12500 & 12000 \
\text { Total manufacturing conversion costs } & \$ 250000 & \$ 240000 \
\text { Manufacturing conversion costs per unit of capacity } & \$ 20 & \$ 20
\end{array}$$
-What is the revenue effect of the price-recovery component?

Accepted Answer

A) $47 500 F 
B) $51 500 U 
C) $50 000 F 
D) $2500 U 
A) $47 500 F 
B) $51 500 U 
C) $50 000 F 
D) $2500 U

Question 5

Excluding non-financial measures when evaluating performance might reduce the significance and importance that managers give to non-financial measures reflected in the balanced scorecard.

Accepted Answer

A) True 
 B)False

Question 6

Parramatta Company has been aggressively developing various types of financial and non-financial measurement schemes to help with the evaluation of its eel processing facility.It appears that the decision-making processes of some of the managers are geared for their department's benefit,leading to the detriment of the organisation as a whole.
Required:
What changes in the evaluation system could the company make to help minimise the suboptimisation of the managers' decision-making processes?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The company could implement a total fact

Question 7

When unused capacity is identified,what actions can management take?

Accepted Answer

A) Eliminate the unused capacity. 
B) Attempt to grow to utilise the unused capacity. 
C) Both A and B are correct. 
D) Neither A nor B are correct. 
A) Eliminate the unused capacity. 
B) Attempt to grow to utilise the unused capacity. 
C) Both A and B are correct. 
D) Neither A nor B are correct.

Question 8

The return-on-investment ratio is an example of a balanced-scorecard measure of the:

Accepted Answer

A) internal business process perspective. 
B) customer perspective. 
C) learning and growth perspective. 
D) financial perspective. 
A) internal business process perspective. 
B) customer perspective. 
C) learning and growth perspective. 
D) financial perspective.

Question 9

Some managers use statistical methods,such as regression analysis,to test the anticipated cause-and-effect relationships between various non-financial measures and financial measures.

Accepted Answer

A) True 
 B)False

Question 10

Discretionary costs:

Accepted Answer

A) result from a cause-and-effect relationship between the output and the input. 
B) pertain to processes that are detailed. 
C) can be variable or fixed in the short run. 
D) include advertising and executive training costs. 
A) result from a cause-and-effect relationship between the output and the input. 
B) pertain to processes that are detailed. 
C) can be variable or fixed in the short run. 
D) include advertising and executive training costs.

Question 11

Answer the following questions using the information below:
Following a strategy of product differentiation,Platypus Company makes a high-end appliance,AP15.Platypus Company presents the following data for the years 2017 and 2018:
 $$\begin{array} { l r r } 
& 2017 & 2018 \
\text { Units of AP15 produced and sold } & 20000 & 21000 \
\text { Selling price } & \$ 200 & \$ 220 \
\text { Direct materials (square metres) } & 60000 & 61500 \
\text { Direct materials costs per square metre } & \$ 20 & \$ 22 \
\text { Manufacturing capacity in urits of AP15 } & 25000 & 25000 \
\text { Total conversion costs } & \$ 1000000 & \$ 1110000 \
\text { Conversion costs per unit of capacity } & \$ 40 & \$ 44 \
\text { Selling and customer-service capacity (customers) } & 60 & 58 \
\text { Total selling and customer-service costs } & \$ 360000 & \$ 362500 \
\text { Selling and customer-service capacity cost per customer } & \$ 6000 & \$ 6250
\end{array}$$ Platypus Company produces no defective units but it wants to reduce direct materials usage per unit of AP15 in 2019.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.Platypus Company has 46 customers in 2017 and 50 customers in 2018.The industry market size for high-end appliances increased 5% from 2017 to 2018.
-What is operating profit for 2017?

Accepted Answer

A) $200 000 
B) $1 804 500 
C) $1 440 000 
D) $364 500 
A) $200 000 
B) $1 804 500 
C) $1 440 000 
D) $364 500

Question 12

Managements of not-for-profit organisations design the cause-and-effect chain to achieve their strategic service objectives.

Accepted Answer

A) True 
 B)False

Question 13

Measures of the balanced scorecard's customer perspective include:

Accepted Answer

A) market share. 
B) employee satisfaction ratings. 
C) revenue growth. 
D) number of process improvements. 
A) market share. 
B) employee satisfaction ratings. 
C) revenue growth. 
D) number of process improvements.

Question 14

A 'strategy map' is a diagram that shows how an organisation creates value by connecting strategic objectives in explicit cause-and-effect relationships with one another in the financial,customer,internal-business-process,and learning-and-growth perspectives.

Accepted Answer

A) True 
 B)False

Question 15

Answer the following questions using the information below:
Following a strategy of product differentiation,Platypus Company makes a high-end appliance,AP15.Platypus Company presents the following data for the years 2017 and 2018:
 $$\begin{array} { l r r } 
& 2017 & 2018 \
\text { Units of AP15 produced and sold } & 20000 & 21000 \
\text { Selling price } & \$ 200 & \$ 220 \
\text { Direct materials (square metres) } & 60000 & 61500 \
\text { Direct materials costs per square metre } & \$ 20 & \$ 22 \
\text { Manufacturing capacity in urits of AP15 } & 25000 & 25000 \
\text { Total conversion costs } & \$ 1000000 & \$ 1110000 \
\text { Conversion costs per unit of capacity } & \$ 40 & \$ 44 \
\text { Selling and customer-service capacity (customers) } & 60 & 58 \
\text { Total selling and customer-service costs } & \$ 360000 & \$ 362500 \
\text { Selling and customer-service capacity cost per customer } & \$ 6000 & \$ 6250
\end{array}$$ Platypus Company produces no defective units but it wants to reduce direct materials usage per unit of AP15 in 2019.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.Platypus Company has 46 customers in 2017 and 50 customers in 2018.The industry market size for high-end appliances increased 5% from 2017 to 2018.
-What is operating profit in 2018?

Accepted Answer

A) $200 000 
B) $1 804 500 
C) $1 440 000 
D) $364 500 
A) $200 000 
B) $1 804 500 
C) $1 440 000 
D) $364 500

Question 16

Survey of employee satisfaction is an example of a balanced-scorecard measure of the:

Accepted Answer

A) internal business process perspective. 
B) customer perspective. 
C) learning and growth perspective. 
D) financial perspective. 
A) internal business process perspective. 
B) customer perspective. 
C) learning and growth perspective. 
D) financial perspective.

Question 17

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

Accepted Answer

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

Question 18

One way to eliminate unused capacity is to downsize.

Accepted Answer

A) True 
 B)False

Question 19

Interactive control systems relate to strategic uncertainties and focus managers' attention and learning on key strategic issues.

Accepted Answer

A) True 
 B)False

Question 20

Research and development cost is an example of an engineered cost.

Accepted Answer

A) True 
 B)False

An increase of operating profit from one year to the next indicates a company's strategy was successful.

Excluding non-financial measures when evaluating performance might reduce the significance and importance that managers give to non-financial measures reflected in the balanced scorecard.

When unused capacity is identified,what actions can management take?

The return-on-investment ratio is an example of a balanced-scorecard measure of the:

Some managers use statistical methods,such as regression analysis,to test the anticipated cause-and-effect relationships between various non-financial measures and financial measures.

Discretionary costs:

Managements of not-for-profit organisations design the cause-and-effect chain to achieve their strategic service objectives.

Measures of the balanced scorecard's customer perspective include:

A 'strategy map' is a diagram that shows how an organisation creates value by connecting strategic objectives in explicit cause-and-effect relationships with one another in the financial,customer,internal-business-process,and learning-and-growth perspectives.

Survey of employee satisfaction is an example of a balanced-scorecard measure of the:

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

One way to eliminate unused capacity is to downsize.

Interactive control systems relate to strategic uncertainties and focus managers' attention and learning on key strategic issues.

Research and development cost is an example of an engineered cost.

Management Accounting in Context

Different Costs for Different Purposes

Determining How Costs Behave

Costvolumeprofit Analysis

Estimating the Cost of Producing Services

Estimating the Costs of Products and Inventory

Target Costing, Managing Activities and Managing Capacity

Activity-Based Management and Activity-Based Costing

Pricing and Customer Profitability

Decision Making and Relevant Information

Budgeting, Management Control and Responsibility Accounting

Flexible Budgets, Direct Cost Variances and Management Control

Flexible Budgets, Overhead Cost Variances and Management Control

Allocation of Support-Department Costs, Common Costs and Revenues

Quality, Time and the Balanced Scorecard

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

Measuring and Reporting Sustainability

Filters

Exam 15: Strategy Formation, Strategic Control and the Balanced Scorecard

An increase of operating profit from one year to the next indicates a company's strategy was successful.

Excluding non-financial measures when evaluating performance might reduce the significance and importance that managers give to non-financial measures reflected in the balanced scorecard.

When unused capacity is identified,what actions can management take?

The return-on-investment ratio is an example of a balanced-scorecard measure of the:

Some managers use statistical methods,such as regression analysis,to test the anticipated cause-and-effect relationships between various non-financial measures and financial measures.

Discretionary costs:

Managements of not-for-profit organisations design the cause-and-effect chain to achieve their strategic service objectives.

Measures of the balanced scorecard's customer perspective include:

A 'strategy map' is a diagram that shows how an organisation creates value by connecting strategic objectives in explicit cause-and-effect relationships with one another in the financial,customer,internal-business-process,and learning-and-growth perspectives.

Survey of employee satisfaction is an example of a balanced-scorecard measure of the:

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

One way to eliminate unused capacity is to downsize.

Interactive control systems relate to strategic uncertainties and focus managers' attention and learning on key strategic issues.

Research and development cost is an example of an engineered cost.

Management Accounting in Context

Different Costs for Different Purposes

Determining How Costs Behave

Costvolumeprofit Analysis

Estimating the Cost of Producing Services

Estimating the Costs of Products and Inventory

Target Costing, Managing Activities and Managing Capacity

Activity-Based Management and Activity-Based Costing

Pricing and Customer Profitability

Decision Making and Relevant Information

Budgeting, Management Control and Responsibility Accounting

Flexible Budgets, Direct Cost Variances and Management Control

Flexible Budgets, Overhead Cost Variances and Management Control

Allocation of Support-Department Costs, Common Costs and Revenues

Quality, Time and the Balanced Scorecard

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

Measuring and Reporting Sustainability

Filters