Question 1

Answer the following questions using the information below:
Meale Company makes a household appliance with model number X500. The goal for 2012 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 2011 to 2012. The following additional data are available for 2011 and 2012:
 
-What is operating income for 2011?

Accepted Answer

A) $450,000 
B) $1,000,000 
C) $750,000 
D) $700,000

Question 2

Engineered costs:

Accepted Answer

A) possess a high of level uncertainty 
B) are nonrepetitive 
C) are from physically observable activities 
D) have processes that are sketchy or unavailable

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:
  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

The answer of Following a strategy of product differentiation, Sting...

Question 4

Measures of the balanced scorecard's financial perspective include:

Accepted Answer

A) information system availability 
B) number of new patents 
C) revenue growth 
D) defect rates

Question 5

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

Accepted Answer

A) 0.32 units per pound 
B) 0.33 units per pound 
C) 0.40 units per pound 
D) 3.16 units per pound

Question 6

Which of the following is NOT a force that shapes an organization's profit potential?

Accepted Answer

A) Competitors 
B) Equivalent products 
C) Bargaining power of input suppliers 
D) All of these answers are correct.

Question 7

Manufacturing cycle efficiency is an example of a balanced-scorecard measure of the:

Accepted Answer

A) internal business process perspective 
B) customer perspective 
C) learning and growth perspective 
D) financial perspective

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

One problem with total factor productivity revolves around which of the following?

Accepted Answer

A) the measurement of combined productivity of all inputs 
B) the control operations personnel have over inputs 
C) the control operations personnel have over outputs 
D) the marketing mix determined by management

Question 10

Conversion costs are an example of ________.

Accepted Answer

A) direct engineered costs 
B) indirect engineered costs 
C) discretionary costs 
D) unused capacity costs

Question 11

A high level of precision between resources used and output produced exists with:

Accepted Answer

A) engineered costs 
B) discretionary costs 
C) both engineered and discretionary costs 
D) neither engineered nor discretionary costs

Question 12

Partial productivity equals quantity of input used divided by quantity of individual output produced.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

When implementing a balanced scorecard, the cause-and-effect linkages are always precise.

Accepted Answer

A) True 
 B)False

Question 15

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

The answer of Total factor productivity (TFP)is easy to compute...

Question 16

Answer the following questions using the information below:
Wingard Company makes a household appliance with model number X200. The goal for 2012 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 X200 units that can be produced. The industry market size for appliances increased 10% from 2011 to 2012. The following additional data are available for 2011 and 2012:
 
-What is the revenue effect of the price-recovery component?

Accepted Answer

A) $5,000 U 
B) $55,000 U 
C) $50,000 F 
D) $102,500 F

Question 17

The balanced scorecard is said to be "balanced" because it measures:

Accepted Answer

A) short-term and long-term objectives 
B) financial and nonfinancial objectives 
C) internal and external objectives 
D) All of these answers are correct.

Question 18

The return-on-investment ratio is an example of a balanced-scorecard measure of the:

Accepted Answer

A) internal business process perspective 
B) customer perspective 
C) learning and growth perspective 
D) financial perspective

Question 19

Answer the following questions using the information below:
Merrill Company makes a household appliance with model number X800. The goal for 2012 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 X800 units that can be produced. The industry market size for appliances increased 5% from 2011 to 2012. The following additional data are available for 2011 and 2012:
 
-Overall, was Merrill's strategy successful in 2012?

Accepted Answer

A) No, because the selling price per unit decreased. 
B) No, because operating income decreased. 
C) Yes, because less direct materials were used. 
D) No, because more units were produced and sold.

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 13: Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Engineered costs:

Measures of the balanced scorecard's financial perspective include:

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

Which of the following is NOT a force that shapes an organization's profit potential?

Manufacturing cycle efficiency is an example of a balanced-scorecard measure of the:

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

One problem with total factor productivity revolves around which of the following?

Conversion costs are an example of ________.

A high level of precision between resources used and output produced exists with:

Partial productivity equals quantity of input used divided by quantity of individual output produced.

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

When implementing a balanced scorecard, the cause-and-effect linkages are always precise.

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?

The balanced scorecard is said to be "balanced" because it measures:

The return-on-investment ratio is an example of a balanced-scorecard measure of the:

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