Question 1

The differentiation strategy requires all of the following resources, except:

Accepted Answer

A) Strong marketing capability. 
B) Long tradition in the industry or unique skills. 
C) Product engineering. 
D) Products designed for ease of manufacture. 
E) Corporate reputation for quality or technology leadership. 
A) Strong marketing capability. 
B) Long tradition in the industry or unique skills. 
C) Product engineering. 
D) Products designed for ease of manufacture. 
E) Corporate reputation for quality or technology leadership.

Question 2

It is becoming more common to see manufacturing firms use the value chain to take strategic steps to improve the overall profitability of the firm by:

Accepted Answer

A)  Placing greater emphasis on the value chain. 
B)  Moving to an emphasis on upstream activities in the value chain. 
C)  Moving to an emphasis on downstream activities in the value chain. 
D)  Identifying most profitable customers. 
E)  Moving to an emphasis on both the upstream and downstream activities in the value chain. 
A)  Placing greater emphasis on the value chain. 
B)  Moving to an emphasis on upstream activities in the value chain. 
C)  Moving to an emphasis on downstream activities in the value chain. 
D)  Identifying most profitable customers. 
E)  Moving to an emphasis on both the upstream and downstream activities in the value chain.

Question 3

Using value-chain analysis, a firm can develop a competitive advantage by specifically looking for ways to:

Accepted Answer

A) Add value and reduce cost. 
B) Improve manufacturing productivity. 
C) Improve customer service. 
D) Improve product quality. 
E) Reduce organizational risk. 
A) Add value and reduce cost. 
B) Improve manufacturing productivity. 
C) Improve customer service. 
D) Improve product quality. 
E) Reduce organizational risk.

Question 4

During which step of value chain analysis will the company discover whether or not it has a cost advantage, and why?

Accepted Answer

A) During the first step, when the value-chain activities are identified. 
B) During the first step, when the cost driver(s) are identified. 
C) During the second step, when the firm develops a competitive advantage by either reducing cost or adding value. 
D) The entire purpose of value chain analysis is to determine if the company has a cost advantage; therefore, it occurs in all steps. 
E) In the third step, when the company adopts and implements the balanced scorecard 
A) During the first step, when the value-chain activities are identified. 
B) During the first step, when the cost driver(s) are identified. 
C) During the second step, when the firm develops a competitive advantage by either reducing cost or adding value. 
D) The entire purpose of value chain analysis is to determine if the company has a cost advantage; therefore, it occurs in all steps. 
E) In the third step, when the company adopts and implements the balanced scorecard

Question 5

Gordon Manufacturing produces high-end furniture products for the luxury hotel industry. Gordon has succeeded through excellence in design, careful attention to quality in manufacturing and in customer service, and through continuous product innovation. The manufacturing process at Gordon begins with a close consultation with each customer so that the finished product exactly meets the customer's specifications. This commonly means unique designs, special fabrics, and high levels of manufacturing quality. In addition, Gordon believes that a key competitive edge it has over other competitors is that it has an outstanding design staff that is able to work with customers to come up with product designs that go beyond the customer's expectations.
Required:
Present a value chain for Gordon Manufacturing with at least five activities and explain the role of each activity in the value chain.

Accepted Answer

One of a v

Question 6

In SWOT analysis, strengths and weaknesses are most easily identified by looking:

Accepted Answer

A)  At the firm as a potential customer. 
B)  Inside the firm at its specific resources. 
C)  At the firm's competition. 
D)  At the firm's product. 
E)  Outside the firm from a consultant's perspective. 
A)  At the firm as a potential customer. 
B)  Inside the firm at its specific resources. 
C)  At the firm's competition. 
D)  At the firm's product. 
E)  Outside the firm from a consultant's perspective.

Question 7

Which of the following would likely not be considered part of the value chain in a service firm?

Accepted Answer

A) Inspection of product. 
B) Advertising. 
C) Employee training. 
D) Customer service. 
E) Materials handling. 
A) Inspection of product. 
B) Advertising. 
C) Employee training. 
D) Customer service. 
E) Materials handling.

Question 8

Michael Porter's five competitive forces include which one of the following:

Accepted Answer

A) Global competition 
B) Intensity of demand by customers. 
C) Bargaining power of competitors. 
D) Intensity of rivalry among competitors. 
E) None of the above. 
A) Global competition 
B) Intensity of demand by customers. 
C) Bargaining power of competitors. 
D) Intensity of rivalry among competitors. 
E) None of the above.

Question 9

To increase profitability, technology companies such as IBM have shifted their strategic focus toward:

Accepted Answer

A) Increasing equipment sales. 
B) Improving software applications. 
C) Providing new and enhanced customer services. 
D) None of the above. 
A) Increasing equipment sales. 
B) Improving software applications. 
C) Providing new and enhanced customer services. 
D) None of the above.

Question 10

Roweil Company is a manufacturer of agricultural chemicals located in Eastern North Carolina. Roweil sells its products directly to farmers in the Atlantic states the company is known for the quality of the product, its packaging, delivery and customer service. The production process at Roweil involves several steps, one of which involves the cleaning of each vat before a batch of a new chemical is added. This is done so there is no contamination of chemicals. Currently the cleansing of the batch is time-consuming, requiring a good bit of water and additional chemicals, to ensure that the vat is appropriately cleaned. The waste of the cleaning process is itself treated carefully, as many of the chemicals Roweil produces can be harmful to plants and animals if not properly handled. Roweil is considering an investment in new equipment that would speed up the cleaning process and would require less water and fewer additional chemicals. The new process would involve the application of heat and high air flow. The new cleaning equipment would however be quite expensive.
Required:
(a) Comment on the strategic issues facing Roweil concerning the potential investment in the cleaning equipment.
(b) What are the ethical questions, if any, that should be addressed in the above decision?

Accepted Answer

(a) The company operates in a commodity

Question 11

When a firm is determining its opportunities and threats, which of the following would not be mentioned?

Accepted Answer

A)  An intense rivalry with a local competitor was beginning to start a price war. 
B)  The firm just received a patent on its main product. 
C)  The success of the firm's latest marketing campaign. 
D)  In spite of its patent, there are several substitute products consumers could use. 
E)  Increased competition in some of its key product lines. 
A)  An intense rivalry with a local competitor was beginning to start a price war. 
B)  The firm just received a patent on its main product. 
C)  The success of the firm's latest marketing campaign. 
D)  In spite of its patent, there are several substitute products consumers could use. 
E)  Increased competition in some of its key product lines.

Question 12

With regard to critical success factors, which one of the following would not be considered a financial measure of success?

Accepted Answer

A) Cash flow. 
B) Growth in industry productivity. 
C) Sales growth. 
D) Earnings growth. 
E) Reduction in the cost of inventory. 
A) Cash flow. 
B) Growth in industry productivity. 
C) Sales growth. 
D) Earnings growth. 
E) Reduction in the cost of inventory.

Question 13

All of the following are required resources for cost leadership except:

Accepted Answer

A) Substantial capital investment. 
B) Unique skills compared to industry standards. 
C) Products designed for ease of manufacturing. 
D) Process engineering skills. 
A) Substantial capital investment. 
B) Unique skills compared to industry standards. 
C) Products designed for ease of manufacturing. 
D) Process engineering skills.

Question 14

Over the past several years it has become increasingly important for firms to improve achievement towards their social and environmental responsibilities.What is the best way the management accountant can help the firm improve on sustainability?

Accepted Answer

A) Participate in programs of environmental organizations. 
B) Develop and implement a legal staff and public relations staff for dealing with sustainability issues that may affect the firm. 
C) Develop and implement a sustainability scorecard. 
D) Risk management. 
A) Participate in programs of environmental organizations. 
B) Develop and implement a legal staff and public relations staff for dealing with sustainability issues that may affect the firm. 
C) Develop and implement a sustainability scorecard. 
D) Risk management.

Question 15

Which of the following statements concerning value chain analysis is false?

Accepted Answer

A) The goal of value chain analysis is to find areas where a company can either add value or reduce cost. 
B) The value chain focuses on the entire production process, as well as the sale of the product and service after the sale. 
C) If a company cannot compete in a specific area of the value chain, it might consider the option of outsourcing that portion of the value chain to someone who can perform it better. 
D) Throughout most industries, the most successful firms are the ones that operate within the entire value chain, thereby overseeing every aspect of the value chain for the customer. 
A) The goal of value chain analysis is to find areas where a company can either add value or reduce cost. 
B) The value chain focuses on the entire production process, as well as the sale of the product and service after the sale. 
C) If a company cannot compete in a specific area of the value chain, it might consider the option of outsourcing that portion of the value chain to someone who can perform it better. 
D) Throughout most industries, the most successful firms are the ones that operate within the entire value chain, thereby overseeing every aspect of the value chain for the customer.

Question 16

Sustainability is the balancing of short and long term goals in all three dimensions of the company's performance.Those three areas are:

Accepted Answer

A) Economic, social, and environmental. 
B) Economic, social, and financial. 
C) Economic, environmental, and political. 
D) Social, environmental, and financial. 
A) Economic, social, and environmental. 
B) Economic, social, and financial. 
C) Economic, environmental, and political. 
D) Social, environmental, and financial.

Question 17

Williams Instruments manufactures specialized surgical equipment for hospitals and clinics throughout the world. One of Williams' most popular products, comprising 40% of its revenues and 35% of its profits, is a blood pressure measuring device. Average production and sales are 400 units per month. Williams has achieved its success in the market through excellent customer service and product reliability. The manufacturing process consists primarily of assembly of components purchased from various electronic firms, plus a small amount of metalworking and finishing. The manufacturing operations cost $600 per unit. The purchased parts cost Williams $800, of which $300 is for parts which Williams could manufacture in its existing facility for $100 in materials for each unit, plus an investment in labor and equipment which would cost $175,000 per month.
Also, Williams is considering outsourcing to another firm, Matrix Concepts, Inc., the marketing, distribution, and servicing for its units. This would save Williams $75,000 in monthly materials and labor costs. The cost of the contract would be $125 per product.

Required:
(1) Prepare a value chain analysis for Williams to assist in the decision whether to manufacture or buy the parts, and whether to contract out the marketing, distribution, and servicing of the units.
(2) Should Williams continue to: (a) purchase the parts or manufacture them? (b) provide the marketing, distribution and service, or outsource this activity to Matrix? Explain your answers.

Accepted Answer

1.@#IMG-DLM& 2.(a) The cost to purchase is $95,000

Question 18

Which of the following best describes the type of information that cost management must provide that is important for the success of the organization?

Accepted Answer

A) Short term information for decision making. 
B) Reported financial information. 
C) Reported nonfinancial information. 
D) Information that addresses the strategic objectives of the organization. 
E) Long-term planning information. 
A) Short term information for decision making. 
B) Reported financial information. 
C) Reported nonfinancial information. 
D) Information that addresses the strategic objectives of the organization. 
E) Long-term planning information.

Question 19

When performing value chain analysis, which of the following should a firm take into account?

Accepted Answer

A) The firm's competitive position. 
B) Opportunities to reduce cost. 
C) Possible opportunities where value can be added. 
D) The decision to enter or leave an activity in the value chain. 
E) All the above. 
A) The firm's competitive position. 
B) Opportunities to reduce cost. 
C) Possible opportunities where value can be added. 
D) The decision to enter or leave an activity in the value chain. 
E) All the above.

Question 20

NAFTA and WTO refer to

Accepted Answer

A) Organizations with expertise in business process improvement. 
B) Laws and organizations which regulate international trade. 
C) Laws and regulations regarding sustainability. 
D) Organizations and trade groups that work for global economic development. 
E) None of the above. 
A) Organizations with expertise in business process improvement. 
B) Laws and organizations which regulate international trade. 
C) Laws and regulations regarding sustainability. 
D) Organizations and trade groups that work for global economic development. 
E) None of the above.

The differentiation strategy requires all of the following resources, except:

It is becoming more common to see manufacturing firms use the value chain to take strategic steps to improve the overall profitability of the firm by:

Using value-chain analysis, a firm can develop a competitive advantage by specifically looking for ways to:

During which step of value chain analysis will the company discover whether or not it has a cost advantage, and why?

In SWOT analysis, strengths and weaknesses are most easily identified by looking:

Which of the following would likely not be considered part of the value chain in a service firm?

Michael Porter's five competitive forces include which one of the following:

To increase profitability, technology companies such as IBM have shifted their strategic focus toward:

When a firm is determining its opportunities and threats, which of the following would not be mentioned?

With regard to critical success factors, which one of the following would not be considered a financial measure of success?

All of the following are required resources for cost leadership except:

Over the past several years it has become increasingly important for firms to improve achievement towards their social and environmental responsibilities.What is the best way the management accountant can help the firm improve on sustainability?

Which of the following statements concerning value chain analysis is false?

Sustainability is the balancing of short and long term goals in all three dimensions of the company's performance.Those three areas are:

Which of the following best describes the type of information that cost management must provide that is important for the success of the organization?

When performing value chain analysis, which of the following should a firm take into account?

NAFTA and WTO refer to

Cost Management and Strategy

Basic Cost Management Concepts

Job Costing

Activity-Based Costing and Customer Profitability Analysis

Process Costing

Cost Allocation: Departments, Joint Products, and By-Products

Cost Estimation

Short-Term Profit Planning: Cost-Volume-Profit CVP Analysis

Strategy and the Master Budget

Decision Making With a Strategic Emphasis

Strategy and the Analysis of Capital Investments

Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing

Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

Operational Performance Measurement: Indirect-Cost Variances and Resource-Capacity Management

Operational Performance Measurement: Further Analysis of Productivity and Sales

The Management and Control of Quality

Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard

Strategic Performance Measurement: Investment Centers and Transfer Pricing

Management Compensation, Business Analysis, and Business Valuation

Filters

Exam 2: Implementing Strategy: The Value Chain, the Balanced Scorecard, and the Strategy Map

The differentiation strategy requires all of the following resources, except:

It is becoming more common to see manufacturing firms use the value chain to take strategic steps to improve the overall profitability of the firm by:

Using value-chain analysis, a firm can develop a competitive advantage by specifically looking for ways to:

During which step of value chain analysis will the company discover whether or not it has a cost advantage, and why?

In SWOT analysis, strengths and weaknesses are most easily identified by looking:

Which of the following would likely not be considered part of the value chain in a service firm?

Michael Porter's five competitive forces include which one of the following:

To increase profitability, technology companies such as IBM have shifted their strategic focus toward:

When a firm is determining its opportunities and threats, which of the following would not be mentioned?

With regard to critical success factors, which one of the following would not be considered a financial measure of success?

All of the following are required resources for cost leadership except:

Over the past several years it has become increasingly important for firms to improve achievement towards their social and environmental responsibilities.What is the best way the management accountant can help the firm improve on sustainability?

Which of the following statements concerning value chain analysis is false?

Sustainability is the balancing of short and long term goals in all three dimensions of the company's performance.Those three areas are:

Which of the following best describes the type of information that cost management must provide that is important for the success of the organization?

When performing value chain analysis, which of the following should a firm take into account?

NAFTA and WTO refer to

Cost Management and Strategy

Basic Cost Management Concepts

Job Costing

Activity-Based Costing and Customer Profitability Analysis

Process Costing

Cost Allocation: Departments, Joint Products, and By-Products

Cost Estimation

Short-Term Profit Planning: Cost-Volume-Profit CVP Analysis

Strategy and the Master Budget

Decision Making With a Strategic Emphasis

Strategy and the Analysis of Capital Investments

Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing

Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

Operational Performance Measurement: Indirect-Cost Variances and Resource-Capacity Management

Operational Performance Measurement: Further Analysis of Productivity and Sales

The Management and Control of Quality

Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard

Strategic Performance Measurement: Investment Centers and Transfer Pricing

Management Compensation, Business Analysis, and Business Valuation

Filters