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

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.To further company strategy,measures on the balanced scorecard would most likely include ________.

The balanced scorecard uses financial and nonfinancial performance measures to evaluate short-run and long-run performance in a single report.

The customer perspective of the balanced scorecard focuses on the success of the company in its target market.

The price-recovery component of the change in operating income measures solely the effect of price changes on revenues but not costs.

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

Which of the following is a measure of the balanced scorecard's internal process perspective?

Following a strategy of product differentiation,Somerset Corporation makes a high-end computer monitor,CM7.Somerset Corporation presents the following data for the years 2017 and 2018: Somerset Corporation produces no defective units but it wants to reduce direct materials usage per unit of CM7 in 2017.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 2017 and 115 customers in 2018.The industry market size for high-end computer monitors increased 5% from 2017 to 2018. Required: a.What is the revenue effect of the price-recovery component? b.What 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?

Cost-leadership strategy usually focuses productivity and efficiency improvements ,elimination of waste along with effective cost control systems.

________ are the subdivisions of income that management accountants use for the strategic analysis of operating income.

Which of the following statements best define a product differentiation strategy?

Following a strategy of product differentiation,Izzy's Limited Company makes a high-end Appliance,XT15.Izzy's Limited presents the following data for the years 2017 and 2018: Izzy's Limited 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.Izzy's Limited had 155 customers in 2017 and 160 customers in 2018. What is the cost effect of the price-recovery component? (Round any intermediary calculations to two decimals and your final answer to the nearest dollar. )

Foley Products Company makes a household appliance with model number X500.The goal for 2018 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 2017 to 2018.The following additional data are available for 2017 and 2018: What is operating income for 2017?

The cost leadership strategy is best for a company if the engineering staff is more skilled at creatively designing new products than at making process improvements.

Which component of strategy 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?

Terbium Corporation manufactures water toys.It plans to grow by producing high-quality water toys that are delivered in a timely manner.There are a number of other manufacturers who produce similar water toys.Terbium believes that continuously improving its manufacturing processes and reengineering processes to downsize and eliminate excess capacity are critical to implementing its strategy.To further company strategy,measures on the balanced scorecard would most likely include ________.

One advantage of the total factor productivity is that operations managers can use it to easily understand specific labor productivity issues.

An organization that is using the product differentiation approach would most likely do which of the following?

When analyzing the change in operating income,the strategy component of growth ________.

Engineered costs result from a cause-and-effect relationship between the cost driver output and the resources used to produce that output.

Which of the following statements is true of productivity measures?