Question 1

The growth component of a change in operating income measures the effect of price changes on revenues and costs.

Accepted Answer

A) True 
 B)False  False

Question 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.
-Referring to Barry Company,which of the following is a measure of the internal business process perspective?

Accepted Answer

A) operating income growth from charging higher margins for XX 300 
B) market share in the high-end appliance market 
C) production cycle time 
D) number of employees trained in quality management 
E) real-time customer feedback 
A) operating income growth from charging higher margins for XX 300 
B) market share in the high-end appliance market 
C) production cycle time 
D) number of employees trained in quality management 
E) real-time customer feedback C

Question 3

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:
For each balanced scorecard perspective identify two measures of performance that relate to Wondergardens' key success factors.

Accepted Answer

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.

Question 4

One way to eliminate unused capacity is to downsize.

Accepted Answer

A) True 
 B)False

Question 5

Partial productivity equals quantity of output produced divided by quantity of individual input used.

Accepted Answer

A) True 
 B)False

Question 6

Use the information below to answer the following question(s).
Following a strategy of product differentiation,Electronics Inc.makes a hand held calculator,II300.Electronics Inc.presents the following data for the years 1 and 2:
   Electronics Inc.produces no defective units but it wants to reduce direct materials usage per unit of II300 in year 2.Manufacturing conversion costs in each year depend on production capacity defined in terms of II300 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.Electronics 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.Of the $6 increase in unit selling price,$2 is due 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?

Accepted Answer

a.($40 ∗ 50,000)- ($6 ∗ 150,000)- ($8 ∗7

Question 7

The price-recovery component of a change in operating income from one year to the next measures the increase in operating income from selling more units of the product.

Accepted Answer

A) True 
 B)False

Question 8

Distance 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 12,000 units,assuming Distance Company applies the constant returns to scale technology?

Accepted Answer

a.Year 1 Partial productivity of direct

Question 9

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.

Accepted Answer

a.Change in operating income from cost l

Question 10

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 nor 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 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?

Accepted Answer

The answer of Use the information below to answer the...

Question 11

________ 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.

Accepted Answer

A) Total factor productivity 
B) Partial productivity 
C) Productivity 
D) Product yield variance 
E) Manufacturing conversion 
A) Total factor productivity 
B) Partial productivity 
C) Productivity 
D) Product yield variance 
E) Manufacturing conversion

Question 12

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 Barry Company's net increase in operating income as a result of the price-recovery component?

Accepted Answer

A) $101,000 unfavourable 
B) $101,000 favourable 
C) $6,100 favourable 
D) $2,700 unfavourable 
E) $6,100 unfavourable 
A) $101,000 unfavourable 
B) $101,000 favourable 
C) $6,100 favourable 
D) $2,700 unfavourable 
E) $6,100 unfavourable

Question 13

Manufacturing cycle efficiency is a potential measure of the

Accepted Answer

A) financial perspective. 
B) customer perspective. 
C) internal business process perspective. 
D) learning and growth perspective. 
E) real-time feedback capacity. 
A) financial perspective. 
B) customer perspective. 
C) internal business process perspective. 
D) learning and growth perspective. 
E) real-time feedback capacity.

Question 14

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 Luke Company's revenue effect of growth component?

Accepted Answer

A) $440,000 favourable 
B) $400,000 unfavourable 
C) $400,000 favourable 
D) $200,000 favourable 
E) $220,000 favourable 
A) $440,000 favourable 
B) $400,000 unfavourable 
C) $400,000 favourable 
D) $200,000 favourable 
E) $220,000 favourable

Question 15

Uncertainty refers to the possibility that an actual amount will be equal to an expected amount.

Accepted Answer

A) True 
 B)False

Question 16

An organization that is using the product differentiation approach would

Accepted Answer

A) focus on tight cost control. 
B) carefully cultivate its brands. 
C) provide products that are similar to competitors. 
D) invest more in productivity enhancements than R&D. 
E) recognize that demand is more price sensitive than if using a cost leadership approach. 
A) focus on tight cost control. 
B) carefully cultivate its brands. 
C) provide products that are similar to competitors. 
D) invest more in productivity enhancements than R&D. 
E) recognize that demand is more price sensitive than if using a cost leadership approach.

Question 17

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 Barry Company's operating income for year 1?

Accepted Answer

A) $210,000 
B) $366,120 
C) $1,000,000 
D) $260,000 
E) $231,000 
A) $210,000 
B) $366,120 
C) $1,000,000 
D) $260,000 
E) $231,000

Question 18

The price-recovery component of a change in operating income measures the effect of price changes on revenues and costs.

Accepted Answer

A) True 
 B)False

Question 19

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.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) 1.78 unit per litre 
B) 1.74 units per litre 
C) 0.57 units per litre 
D) 0.56 units per litre 
E) 1.67 units per litre 
A) 1.78 unit per litre 
B) 1.74 units per litre 
C) 0.57 units per litre 
D) 0.56 units per litre 
E) 1.67 units per litre

The growth component of a change in operating income measures the effect of price changes on revenues and costs.

One way to eliminate unused capacity is to downsize.

Partial productivity equals quantity of output produced divided by quantity of individual input used.

The price-recovery component of a change in operating income from one year to the next measures the increase in operating income from selling more units of the product.

________ 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.

Manufacturing cycle efficiency is a potential measure of the

Uncertainty refers to the possibility that an actual amount will be equal to an expected amount.

An organization that is using the product differentiation approach would

The price-recovery component of a change in operating income measures the effect of price changes on revenues and costs.

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.

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

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

Analysis of Cost Behaviour

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

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters

Exam 13: Strategy,balanced Scorecard,and Profitability Analysis

The growth component of a change in operating income measures the effect of price changes on revenues and costs.

One way to eliminate unused capacity is to downsize.

Partial productivity equals quantity of output produced divided by quantity of individual input used.

The price-recovery component of a change in operating income from one year to the next measures the increase in operating income from selling more units of the product.

________ 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.

Manufacturing cycle efficiency is a potential measure of the

Uncertainty refers to the possibility that an actual amount will be equal to an expected amount.

An organization that is using the product differentiation approach would

The price-recovery component of a change in operating income measures the effect of price changes on revenues and costs.

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.

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

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

Analysis of Cost Behaviour

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

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters