Exam 13: Strategy,balanced Scorecard,and Profitability Analysis

The internal 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.

Strategies have been classified in many different ways,but what is common is to set the business within its external environment.

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

Bosely Corporation is reviewing its business strategy.The first step for Bosely is to evaluate the competitive environment.You have been hired to help the company go through the strategy formulation process. Required: To perform the analysis of competitive rivalry,what areas should Bosely focus on and give at least one example of how Bosely can effectively deal with each area.

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 financial perspective?

A disadvantage of total factor productivity over partial productivity is that

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 customer 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 cost effect of price-recovery component?

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

Fairytale Weddings manufactures wedding dresses.The following information relates to the manufacture of gowns in its Perth plant: Required: Prepare an analysis of change in annual costs from year 1 to year 2 including direct materials,direct manufacturing labour,and total inputs.

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 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?

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

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

________ has/have been classified in many ways,but what is common is to set the business within its external environment.

Melik 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,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 cost effect of growth component?

Engineered costs differ from discretionary costs by the two key dimensions of: 1)type of process;and,2)the level of uncertainty.

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: 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 to Year 2.

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

An analysis of Louis Brown Corporation's operating income changes between year 1 and year 2 show the following: Required: Is Louis Brown's operating income gain consistent with the product differentiation or cost leadership strategy? Explain briefly.