Exam 13: Strategy, Balanced Scorecard, and Profitability Analysis

________ 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.

Unused capacity is difficult to determine for

Measures of the balanced scorecard's customer perspective include all of the following EXCEPT

Use the information below to answer the following question(s).Following a strategy of product differentiation, Electronics Inc.makes a hand held calculator, II300.Electronics Inc.presents the following data for the years 1 and 2: Electronics Inc.produces no defective units but it wants to reduce direct materials usage per unit of II300 in year 2.Manufacturing conversion costs in each year depend on production capacity defined in terms of II300 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.Neither conversion costs or customer-service costs are affected by changes in actual volume.Electronics Inc.has 23 customers in year 1 and 25 customers in year 2.The industry market size for hand held calculators increased 5% from year 1 to year 2.Of the $6 increase in unit selling price, $2 is due to a general increase in prices. -Required: a.What is the operating income for Year 1? b.What is the operating income in Year 2? c.What is the change in operating income from Year 1 to Year 2? d.What amount is the revenue effect of the growth component? e.What amount is the cost effect of the growth component? f.What is the net effect on operating income as a result of the growth component? g.What amount is the revenue effect of the price-recovery component? h.What amount is the cost effect of the price-recovery component? i.What is the net change in operating income as a result of the price-recovery component? j.What is the net effect on operating income as a result of the productivity component? k.The change in operating income from cost leadership.l.The change in operating income due to industry wide effects.m.The effect of product differentiation on operating income and a summarization of the change in operating income between Year 1 to Year 2.

Use the information below to answer the following question(s).Following a strategy of product differentiation, Barry Company makes an XX 300.Barry Company presents the following data for the years 1 and 2. Barry Company produces no defective units but it wants to reduce direct materials usage per unit of XX 300 in year 2.Manufacturing conversion costs in each year depend on production capacity defined in terms of XX 300 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.Neither conversion costs or customer-service costs are affected by changes in actual volume.Barry Company has 23 customers in year 1 and 25 customers in year 2.The industry market size for high-end appliances increased 5% from year 1 to year 2. -Referring to Barry Company, which of the following is a measure of the financial perspective?

What is the primary purpose of the balanced scorecard?

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

Use the information below to answer the following question(s).Following a strategy of product differentiation, Barry Company makes an XX 300.Barry Company presents the following data for the years 1 and 2. Barry Company produces no defective units but it wants to reduce direct materials usage per unit of XX 300 in year 2.Manufacturing conversion costs in each year depend on production capacity defined in terms of XX 300 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.Neither conversion costs or customer-service costs are affected by changes in actual volume.Barry Company has 23 customers in year 1 and 25 customers in year 2.The industry market size for high-end appliances increased 5% from year 1 to year 2. -Successful implementation of a product differentiation strategy will result in

Use the information below to answer the following question(s).Following a strategy of product differentiation, Luke Company makes a high-end Appliance, AP15.Luke Company presents the following data for the years 1 and 2. Luke Company produces no defective units but it wants to reduce direct materials usage per unit of AP15 in year 2.Manufacturing conversion costs in each year depend on production capacity defined in terms of AP15 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.Neither conversion costs or customer-service costs are affected by changes in actual volume.Luke Company has 46 customers in year 1 and 50 customers in year 2.The industry market size for high-end appliances increased 5% from year 1 to year 2. -Referring to Luke Company, which of the following is a measure of the customer perspective?

The growth component of a change in operating income measures the effect of price changes on revenues and costs.

Engineered costs differ from discretionary costs by the two key dimensions of: 1)type of process; and, 2)the level of uncertainty.

The internal business process perspective focuses on internal operations that further both the customer perspective by creating value for customers and the financial perspective by increasing shareholder wealth.

Use the information below to answer the following question(s).Following a strategy of product differentiation, Luke Company makes a high-end Appliance, AP15.Luke Company presents the following data for the years 1 and 2. Luke Company produces no defective units but it wants to reduce direct materials usage per unit of AP15 in year 2.Manufacturing conversion costs in each year depend on production capacity defined in terms of AP15 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.Neither conversion costs or customer-service costs are affected by changes in actual volume.Luke Company has 46 customers in year 1 and 50 customers in year 2.The industry market size for high-end appliances increased 5% from year 1 to year 2. -What is the Luke Company's revenue effect of price-recovery component?

Describe three key components in doing a strategic analysis of operating income.

Which of the following statements is TRUE concerning productivity?

Uncertainty refers to the possibility that an actual amount will be equal to an expected amount.

________ has/have been classified in many ways, but what is common is to set the business within its external environment.

Use the information below to answer the following question(s).Following a strategy of product differentiation, Luke Company makes a high-end Appliance, AP15.Luke Company presents the following data for the years 1 and 2. Luke Company produces no defective units but it wants to reduce direct materials usage per unit of AP15 in year 2.Manufacturing conversion costs in each year depend on production capacity defined in terms of AP15 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.Neither conversion costs or customer-service costs are affected by changes in actual volume.Luke Company has 46 customers in year 1 and 50 customers in year 2.The industry market size for high-end appliances increased 5% from year 1 to year 2. -What is the Luke Company's change in operating income from year 1 to year 2?

Answer the following questions using the information below: Merrill Company makes a household appliance with model number X800.The goal for Year 2 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 Year 1 to Year 2.The following additional data are available for Years 1 and 2: -What is the Merrill Company's revenue effect of the growth component?

Use the information below to answer the following question(s).Following a strategy of product differentiation, Luke Company makes a high-end Appliance, AP15.Luke Company presents the following data for the years 1 and 2. Luke Company produces no defective units but it wants to reduce direct materials usage per unit of AP15 in year 2.Manufacturing conversion costs in each year depend on production capacity defined in terms of AP15 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.Neither conversion costs or customer-service costs are affected by changes in actual volume.Luke Company has 46 customers in year 1 and 50 customers in year 2.The industry market size for high-end appliances increased 5% from year 1 to year 2. -Referring to Luke Company, which of the following is a measure of the internal business process perspective?