Question 1

________ is a measure of the balanced scorecard's financial perspective.

Accepted Answer

A)  Service response time 
B)  Number of new patents 
C)  Operating income 
D)  Defect rates 
A)  Service response time 
B)  Number of new patents 
C)  Operating income 
D)  Defect rates

Question 2

________ is a measure of the balanced scorecard's internal process perspective.

Accepted Answer

A)  Service response time 
B)  Customer satisfaction 
C)  Gross profit percentage 
D)  Cost reduction 
A)  Service response time 
B)  Customer satisfaction 
C)  Gross profit percentage 
D)  Cost reduction

Question 3

Following a strategy of product differentiation,Sting Corporation makes a high-end computer monitor,CM7.Sting Corporation presents the following data for the years 2012 and 2013:
 $\begin{array}{lrr}&2012&2013\
\text { Units of CM7 produced and sold } & 5,000 & 5,500 \
\text { Selling price } & \$ 400 & \$ 440 \
\text { Direct materials (pounds) } & 15,000 & 15,375 \
\text { Direct materials costs per pound } & \$ 40 & \$ 44 \
\text { Manufacturing capacity for CM7 (units) } & 10,000 & 10,000\\text { Conversion costs } & \$ 1,000,000 & \$ 1,100,000 \
\text { Conversion costs per unit of capacity } & \$ 100 & \$ 110 \
\text { Selling and customer-service capacity (customers) } & 60 & 58 \
\text { Total selling and customer-service costs } & \$ 360,000 & \$ 362,500 \
\text { Selling and customer-service capacity cost per customer } & \$ 6,000 & \$ 6,250\
\end{array}$ Sting Corporation produces no defective units but it wants to reduce direct materials usage per unit of CM7 in 2013.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.Ernsting Corporation has 100 customers in 2012 and 115 customers in 2013.The industry market size for high-end computer monitors increased 5% from 2012 to 2013.
Required:
a.What is the revenue effect of the growth component?
b.What is the cost effect of the growth component?
c.What is the net effect on operating income as a result of the growth component?

Accepted Answer

a.(5,500 - 5,000)× $400 = $200

Question 4

An analysis of Ruthen Corporation's operating income changes between 2015 and 2016 show the following:
 $\begin{array}{lr}
\text { Operating income for } 2015 & \$ 4,750,000 \
\text { Add growth component } & 180,000 \
\text { Ded uct price-recovery component } & (60,000) \
\text { Add productivity component } & 285,000\\text { Operating income for } 2016&\$5,155,000
\end{array}$ Required:
Is Ruthen's operating income gain consistent with the product differentiation or cost leadership strategy? Explain briefly.

Accepted Answer

Ruthen's operating income gain is consis

Question 5

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 price-recovery component?

Accepted Answer

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

Question 6

Downsizing is an integrated approach of configuring processes,products,and people to match costs to the activities that need to be performed to operate effectively and efficiently in the present and future.

Accepted Answer

A) True 
 B)False

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 operating income for 2014?

Accepted Answer

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

Question 8

An analysis of Baker,Inc.'s operating income for the last two years showed the following: $$\begin{array} { | l | r | } 
\hline \text { Operating income for } 2011 & \$ 1,200,000 \
\hline \text { Add growth component } & 30,000 \
\hline \text { Add price-recovery component } & 200,000 \
\hline \text { Deduct productivity component } & ( 16,000 \
\hline \text { Operating income for 2012 } & \$ 1,414,000 \
\hline
\end{array}$$ This gain in operating income is consistent with a ________.

Accepted Answer

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

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Yield variances ________.

Accepted Answer

A)  reveal the effect of substitution within a single factor of production 
B)  address the productivity of a single component of one factor of production 
C)  capture both substitutions between factors of production as well as within factors of production 
D)  reveal the effect of substitution within multiple factors of production 
A)  reveal the effect of substitution within a single factor of production 
B)  address the productivity of a single component of one factor of production 
C)  capture both substitutions between factors of production as well as within factors of production 
D)  reveal the effect of substitution within multiple factors of production

Question 11

A ________ is a diagram that describes how an organization creates value by connecting strategic objectives in explicit cause-and-effect relationships with each other in the balanced scorecard perspectives.

Accepted Answer

A)  value diagram 
B)  balanced scoreboard 
C)  strategic scorecard 
D)  strategy map 
A)  value diagram 
B)  balanced scoreboard 
C)  strategic scorecard 
D)  strategy map

Question 12

Can a company identify unused capacity and,if so,how can unused capacity be managed?

Accepted Answer

It is relatively easy for a company to r

________ is a measure of the balanced scorecard's financial perspective.

________ is a measure of the balanced scorecard's internal process perspective.

Downsizing is an integrated approach of configuring processes,products,and people to match costs to the activities that need to be performed to operate effectively and efficiently in the present and future.

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

Yield variances ________.

A ________ is a diagram that describes how an organization creates value by connecting strategic objectives in explicit cause-and-effect relationships with each other in the balanced scorecard perspectives.

Can a company identify unused capacity and,if so,how can unused capacity be managed?

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

________ is a measure of the balanced scorecard's financial perspective.

________ is a measure of the balanced scorecard's internal process perspective.

Downsizing is an integrated approach of configuring processes,products,and people to match costs to the activities that need to be performed to operate effectively and efficiently in the present and future.

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

Yield variances ________.

A ________ is a diagram that describes how an organization creates value by connecting strategic objectives in explicit cause-and-effect relationships with each other in the balanced scorecard perspectives.

Can a company identify unused capacity and,if so,how can unused capacity be managed?

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