Exam 13: Strategy,balanced Scorecard,and Profitability Analysis

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: What is the amount of the productivity component?

Successful implementation of a product differentiation strategy will result in

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

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 net increase in operating income as a result of the growth component?

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

What are the four key perspectives in the balanced scorecard?

Following a strategy of product differentiation,Sting Corporation makes a high-end computer monitor,CM7.Sting Corporation presents the following data for the years 2015 and 2016: Sting Corporation wants to reduce direct materials usage per unit of CM7 in 2016.Manufacturing conversion costs in each year depend on production capacity defined in terms of CM7 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.Sting Corporation has 100 customers in 2015 and 115 customers in 2016.The industry market size for high-end computer monitors increased 5% from 2015 to 2016. Required: a.Calculate the effect on the change of operating income as a result of the productivity component. b.What is the partial productivity ratio for the direct materials for each year? (round to 4 decimal places)Give a plausible underlying reason for what may have caused the ratio to change. c.What is the total factor productivity for 2016 and the total factor productivity benchmark based on input costs that would have been used in 2015 to produce 2016 output?(round to 4 decimal places) d.Provide two key success factors,and a corresponding measure for each,that relate to Sting Corporation's internal business process balanced scorecard perspective.

Explain the product differentiation and the cost leadership strategies.

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. b.Identify at least one key measure for each balanced scorecard perspective .

________ measures the changes in operating income attributed solely to an increase in the quantity of output between years one and two.

Measures of the balanced scorecard's customer perspective include all of the following EXCEPT

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 learning and growth perspective?

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 operating income for year 1?

The productivity component measures the reduction in costs attributable to a reduction in the quantity of inputs used in year 2 relative to the quantity of inputs that would have been used in year 1 to produce the year 2 output.

Maloney Corporation manufactures plastic water bottles.It plans to grow by producing high-quality water bottles at a low cost that are delivered in a timely manner.There are a number of other manufacturers who produce similar water bottles.Maloney believes that continuously improving its manufacturing processes and having satisfied employees are critical to implementing its strategy. Required: a.Is Maloney's strategy one of product differentiation or cost leadership? Explain briefly. b.Identify at least one key measure for each balanced scorecard perspective.

Downsizing often means eliminating jobs,which can have an adverse effect on employee morale.

According to Michael Porter which of the following is a force that shapes an organization's competitive environment?

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 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 effect on operating income as a result of the price-recovery component? d.What is the net effect on operating income as a result of the productivity component?

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

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 productivity component of change in operating income?