Question 1

Which of the following statements is true of the internal-business-process perspective of a balanced scorecard?

Accepted Answer

A)  Internal-business-process perspective is composed of three subprocesses: innovation process; learning-and-growth process; and postsales-service process. 
B)  Internal-business-process perspective evaluates the profitability of the strategy and the creation of shareholder value. 
C)  Internal-business-process improvement targets are often determined after benchmarking against an organization's main competitors standards. 
D)  Internal-business-process perspective is composed of three subprocesses: operations process; learning-and-growth process; and postsales-service process. 
A)  Internal-business-process perspective is composed of three subprocesses: innovation process; learning-and-growth process; and postsales-service process. 
B)  Internal-business-process perspective evaluates the profitability of the strategy and the creation of shareholder value. 
C)  Internal-business-process improvement targets are often determined after benchmarking against an organization's main competitors standards. 
D)  Internal-business-process perspective is composed of three subprocesses: operations process; learning-and-growth process; and postsales-service process.

Question 2

Stewart Corporation plans to grow by offering a sound system,the SS3000,that is superior and unique from the competition.Stewart believes that putting additional resources into R&D and staying ahead of the competition with technological innovations is critical to implementing its strategy.Stewart's strategy is ________.

Accepted Answer

A)  product differentiation 
B)  downsizing 
C)  product leadership 
D)  cost leadership 
A)  product differentiation 
B)  downsizing 
C)  product leadership 
D)  cost leadership

Question 3

Which of the following is the correct mathematical expression to calculate a benchmark total factor productivity?

Accepted Answer

A)  Quantity of output produced in current year ÷ Costs of inputs at current year prices that would have been used in previous year to produce current year output 
B)  Quantity of output produced in previous year ÷ Costs of inputs at current year prices that would have been used in previous year to produce current year output 
C)  Quantity of output produced in current year ÷ Costs of inputs at previous year prices that would have been used in previous year to produce current year output 
D)  Quantity of output produced in previous year ÷ Costs of inputs at previous year prices that would have been used in previous year to produce current year output 
A)  Quantity of output produced in current year ÷ Costs of inputs at current year prices that would have been used in previous year to produce current year output 
B)  Quantity of output produced in previous year ÷ Costs of inputs at current year prices that would have been used in previous year to produce current year output 
C)  Quantity of output produced in current year ÷ Costs of inputs at previous year prices that would have been used in previous year to produce current year output 
D)  Quantity of output produced in previous year ÷ Costs of inputs at previous year prices that would have been used in previous year to produce current year output

Question 4

Time taken to replace or repair defective products is a measure of the financial perspective of the balanced scorecard.

Accepted Answer

A) True 
 B)False

Question 5

The customer perspective of the balanced scorecard evaluates the profitability of the strategy.

Accepted Answer

A) True 
 B)False

Question 6

It is difficult to determine unused capacity for ________.

Accepted Answer

A)  direct engineered costs 
B)  discretionary costs 
C)  variable costs 
D)  marginal costs 
A)  direct engineered costs 
B)  discretionary costs 
C)  variable costs 
D)  marginal costs

Question 7

Answer the following questions using the information below:
Following a strategy of product differentiation, Arseniq Company makes a high-end Appliance, XT15. Arseniq presents the following data for the years 2014 and 2015:
 $\begin{array}{lrr}&2014&2015\
\text { Units of XT15 produced and sold } & 50,000 & 52,500 \
\text { Selling price } & \$ 500 & \$ 550 \
\text { Direct materials (square feet) } & 150,000 & 153,750 \
\text { Direct materials costs per square foot } & \$ 50 & \$ 55 \
\text { Manufacturing capacity in units of XT15 } & 62,500 & 62,500\
\text { Total conversion costs } & \$ 6,250,000 & \$ 6,875,000 \
\text { Conversion costs per unit of capacity } & \$ 100 & \$ 110 \
\text { Selling and customer-service capacity (customers) } & 150 & 150 \
\text { Total selling and customer-service costs } & \$ 2,250,000 & \$ 2,343,750 \
\text { Selling and customer-service capacity cost per customer } & \$ 15,000 & \$ 15,625
\end{array}$ Arseniq produces no defective units but it wants to reduce direct materials usage per unit of XT15. Manufacturing conversion costs in each year depend on production capacity defined in terms of XT15 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. Arseniq had 140 customers in 2014 and 145 customers in 2015.
-What is the cost effect of the growth component?

Accepted Answer

A)  $375,000 U 
B)  $1,506,250 U 
C)  $1,506,250 O 
D)  $375,000 O 
A)  $375,000 U 
B)  $1,506,250 U 
C)  $1,506,250 O 
D)  $375,000 O

Question 8

Total factor productivity (TFP)is easy to compute for a single-product company.When dealing with a multiproduct company,one of two adjustments must be made.What are these potential adjustments?

Accepted Answer

One of the following two adjustments mus

Question 9

Which of the following statements is true of a balanced scorecard?

Accepted Answer

A)  The balanced scorecard reduces managers' emphasis on long-run financial performance. 
B)  The balanced scorecard reduces managers' emphasis on short-run financial performance. 
C)  The primary goal of using the balanced scorecard is to sustain short-run financial performance. 
D)  The primary goal of using the balanced scorecard is to sustain short-run nonfinancial performance. 
A)  The balanced scorecard reduces managers' emphasis on long-run financial performance. 
B)  The balanced scorecard reduces managers' emphasis on short-run financial performance. 
C)  The primary goal of using the balanced scorecard is to sustain short-run financial performance. 
D)  The primary goal of using the balanced scorecard is to sustain short-run nonfinancial performance.

Question 10

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

Accepted Answer

A)  Strategy 
B)  Product differentiation 
C)  Cost leadership 
D)  The balanced scorecard 
A)  Strategy 
B)  Product differentiation 
C)  Cost leadership 
D)  The balanced scorecard

Question 11

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

Accepted Answer

The industry analysis is composed of fiv

Question 12

Meale Company makes a household appliance with model number X500. The goal for 2015 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 X500 units that can be produced. The industry market size for appliances increased 10% from 2014 to 2015. The following additional data are available for 2014 and 2015:
 $\begin{array}{lrr}&2014&2015\
\text { Units of } X 500 \text { produced and sold } & 10,000 & 11,000 \
\text { Selling price } & \$ 100 & \$ 95 \
\text { Direct materials (square feet) } & 30,000 & 29,000 \
\text { Direct material costs per square foot } & \$ 10 & \$ 11\\text { Manufacturing capacity for } X 500 \text { (units) } & 12,500 & 12,000 \
\text { Total conversion costs } & \$ 250,000 & \$ 240,000 \
\text { Conversion costs per unit of capacity } & \$ 20 & \$ 20
\end{array}$
-What is operating income for 2015?

Accepted Answer

A)  $1,045,000 
B)  $726,000 
C)  $486,000 
D)  $476,000 
A)  $1,045,000 
B)  $726,000 
C)  $486,000 
D)  $476,000

Question 13

An operating income analysis of Argon Company revealed the following: $\begin{array}{lr}
\text { Operating income for 2014 } & \$ 1,207,000 \
\text { Add growth component } & 102,000 \
\text { Deduct price-recovery component } & (95,000) \
\text { Add productivity component } & 90,000\
\text { Operating income for } 2015&\$1,304,000
\end{array}$ Argon's operating income gain is consistent with the ________.

Accepted Answer

A)  product differentiation strategy 
B)  product leadership strategy 
C)  cost differentiation strategy 
D)  cost leadership strategy 
A)  product differentiation strategy 
B)  product leadership strategy 
C)  cost differentiation strategy 
D)  cost leadership strategy

Question 14

It is relatively easy to identify unused capacity for discretionary costs.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements best relates to the balanced scorecard's internal business processes perspective?

Accepted Answer

A)  How do we lower costs? 
B)  How do we motivate employees? 
C)  How can we obtain greater profits? 
D)  How processes will increase value to customers? 
A)  How do we lower costs? 
B)  How do we motivate employees? 
C)  How can we obtain greater profits? 
D)  How processes will increase value to customers?

Question 16

Answer the following questions using the information below:
Following a strategy of product differentiation, Arseniq Company makes a high-end Appliance, XT15. Arseniq presents the following data for the years 2014 and 2015:
 $\begin{array}{lrr}&2014&2015\
\text { Units of XT15 produced and sold } & 50,000 & 52,500 \
\text { Selling price } & \$ 500 & \$ 550 \
\text { Direct materials (square feet) } & 150,000 & 153,750 \
\text { Direct materials costs per square foot } & \$ 50 & \$ 55 \
\text { Manufacturing capacity in units of XT15 } & 62,500 & 62,500\
\text { Total conversion costs } & \$ 6,250,000 & \$ 6,875,000 \
\text { Conversion costs per unit of capacity } & \$ 100 & \$ 110 \
\text { Selling and customer-service capacity (customers) } & 150 & 150 \
\text { Total selling and customer-service costs } & \$ 2,250,000 & \$ 2,343,750 \
\text { Selling and customer-service capacity cost per customer } & \$ 15,000 & \$ 15,625
\end{array}$ Arseniq produces no defective units but it wants to reduce direct materials usage per unit of XT15. Manufacturing conversion costs in each year depend on production capacity defined in terms of XT15 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. Arseniq had 140 customers in 2014 and 145 customers in 2015.
-What is operating income in 2015?

Accepted Answer

A)  $11,440,000 
B)  $11,200,000 
C)  $9,000,000 
D)  $9,207,000 
A)  $11,440,000 
B)  $11,200,000 
C)  $9,000,000 
D)  $9,207,000

Question 17

An organization which uses product differentiation strategy will charge higher prices.

Accepted Answer

A) True 
 B)False

Question 18

When analyzing the change in operating income,the strategy component of price-recovery will increase when ________.

Accepted Answer

A)  capacity is reduced 
B)  market share is increased 
C)  selling prices are increased 
D)  more units are sold 
A)  capacity is reduced 
B)  market share is increased 
C)  selling prices are increased 
D)  more units are sold

Question 19

Cost effect of productivity for fixed costs is calculated by multiplying the difference in units of capacity (current year capacity units minus the previous year capacity units)by price per unit of capacity of the previous year.

Accepted Answer

A) True 
 B)False

Question 20

The revenue effect of growth is calculated by multiplying the difference in units sold (current year minus the previous year)by selling price in the current year.

Accepted Answer

A) True 
 B)False

Which of the following statements is true of the internal-business-process perspective of a balanced scorecard?

Which of the following is the correct mathematical expression to calculate a benchmark total factor productivity?

Time taken to replace or repair defective products is a measure of the financial perspective of the balanced scorecard.

The customer perspective of the balanced scorecard evaluates the profitability of the strategy.

It is difficult to determine unused capacity for ________.

Total factor productivity (TFP)is easy to compute for a single-product company.When dealing with a multiproduct company,one of two adjustments must be made.What are these potential adjustments?

Which of the following statements is true of a balanced scorecard?

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

It is relatively easy to identify unused capacity for discretionary costs.

Which of the following statements best relates to the balanced scorecard's internal business processes perspective?

An organization which uses product differentiation strategy will charge higher prices.

When analyzing the change in operating income,the strategy component of price-recovery will increase when ________.

Cost effect of productivity for fixed costs is calculated by multiplying the difference in units of capacity (current year capacity units minus the previous year capacity units)by price per unit of capacity of the previous year.

The revenue effect of growth is calculated by multiplying the difference in units sold (current year minus the previous year)by selling price in the current year.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, direct-Cost Variances, and Management Control

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

Balanced Scorecard: Quality and Time

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

Filters

Exam 12: Strategy, balanced Scorecard, and Strategic Profitability Analysis

Which of the following statements is true of the internal-business-process perspective of a balanced scorecard?

Which of the following is the correct mathematical expression to calculate a benchmark total factor productivity?

Time taken to replace or repair defective products is a measure of the financial perspective of the balanced scorecard.

The customer perspective of the balanced scorecard evaluates the profitability of the strategy.

It is difficult to determine unused capacity for ________.

Total factor productivity (TFP)is easy to compute for a single-product company.When dealing with a multiproduct company,one of two adjustments must be made.What are these potential adjustments?

Which of the following statements is true of a balanced scorecard?

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

It is relatively easy to identify unused capacity for discretionary costs.

Which of the following statements best relates to the balanced scorecard's internal business processes perspective?

An organization which uses product differentiation strategy will charge higher prices.

When analyzing the change in operating income,the strategy component of price-recovery will increase when ________.

Cost effect of productivity for fixed costs is calculated by multiplying the difference in units of capacity (current year capacity units minus the previous year capacity units)by price per unit of capacity of the previous year.

The revenue effect of growth is calculated by multiplying the difference in units sold (current year minus the previous year)by selling price in the current year.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, direct-Cost Variances, and Management Control

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

Balanced Scorecard: Quality and Time

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

Filters