Question 1

An organization that is using the cost leadership approach would

Accepted Answer

A) incur costs for innovative R&D. 
B) provide products at a higher price but with lower costs than its competitors. 
C) focus on productivity through efficiency improvements. 
D) bring products to market rapidly. 
E) use a cost plus rather than a target pricing policy. 
A) incur costs for innovative R&D. 
B) provide products at a higher price but with lower costs than its competitors. 
C) focus on productivity through efficiency improvements. 
D) bring products to market rapidly. 
E) use a cost plus rather than a target pricing policy.

Question 2

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

Accepted Answer

A) 0.32 units per kilogram 
B) 0.42 units per kilogram 
C) 2.40 units per kilogram 
D) 3.16 units per kilogram 
E) 0.80 units per kilogram 
A) 0.32 units per kilogram 
B) 0.42 units per kilogram 
C) 2.40 units per kilogram 
D) 3.16 units per kilogram 
E) 0.80 units per kilogram

Question 3

Use the information below to answer the following question(s).Following a strategy of product differentiation, Ernsting Ltd.makes high quality electronic components.Ernsting Ltd.presents the following data for the past two years relating to its XJ649 product.   Ernsting produces no defective units but it wants to reduce direct materials usage per unit in Year 2 .Manufacturing conversion costs in each year depend on production capacity defined in terms of 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 nor customer-service costs are affected by changes in actual volume.Ernsting has 60 customers in Year 1 and 66 customers in Year 2.The industry market size for the product increased 6% from Year 1 to Year 2.Of the $50 increase in unit selling price, $30 is attributable to a general price increase.
-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 effect on 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.

Accepted Answer

a.($800 × 4,000)- [($60 × 10,400)+ ($90

Question 4

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.
-What is the Barry Company's operating income in year 2?

Accepted Answer

A) $378,600 
B) $366,120 
C) $1,242,000 
D) $403,520 
E) $210,000 
A) $378,600 
B) $366,120 
C) $1,242,000 
D) $403,520 
E) $210,000

Question 5

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 financial perspective?

Accepted Answer

A) reengineering process 
B) market share in the high-end appliance market 
C) order delivery time 
D) production cycle time 
E) operating income growth from changing higher margins 
A) reengineering process 
B) market share in the high-end appliance market 
C) order delivery time 
D) production cycle time 
E) operating income growth from changing higher margins

Question 6

To evaluate the success of its strategy, a company can subdivide the change in costs into growth, price-recovery and productivity components.

Accepted Answer

A) True 
 B)False

Question 7

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.
-________ measures the changes in operating income attributed solely to an increase in the quantity of output between years one and two.

Accepted Answer

A) The growth component 
B) The price-recovery component 
C) The productivity component 
D) The cost leadership component 
E) The strategy component 
A) The growth component 
B) The price-recovery component 
C) The productivity component 
D) The cost leadership component 
E) The strategy component

Question 8

Downsizing is also called rightsizing.

Accepted Answer

A) True 
 B)False

Question 9

What is the direct manufacturing labour partial productivity, assuming 10,000 units were produced during the year and 40,000 direct manufacturing labour-hours were used?

Accepted Answer

A) 0.25 unit per direct manufacturing labour-hour 
B) 0.50 unit per direct manufacturing labour-hour 
C) 0.75 unit per direct manufacturing labour-hour 
D) 4.00 unit per direct manufacturing labour-hour 
E) 1.25 unit per direct manufacturing labour-hour 
A) 0.25 unit per direct manufacturing labour-hour 
B) 0.50 unit per direct manufacturing labour-hour 
C) 0.75 unit per direct manufacturing labour-hour 
D) 4.00 unit per direct manufacturing labour-hour 
E) 1.25 unit per direct manufacturing labour-hour

Question 10

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

One of the following two adjustments mus

Question 11

Buck Corporation plans to grow by offering a computer monitor, the CM3000 that is superior and unique from the competition.Buck believes that putting additional resources into R&D and staying ahead of the competition with technological innovations are critical to implementing its strategy.Required:
a.Is Buck's strategy one of product differentiation or cost leadership? Explain briefly.
b.Identify at least one key measure for each balanced scorecard perspective.

Accepted Answer

a.Buck's strategy is one of product diff

Question 12

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.
-What is the Barry Company's productivity component of change in operating income?

Accepted Answer

A) $31,620 favourable 
B) $11,120 favourable 
C) $11,120 unfavourable 
D) $33,520 favourable 
E) $33,520 unfavourable 
A) $31,620 favourable 
B) $11,120 favourable 
C) $11,120 unfavourable 
D) $33,520 favourable 
E) $33,520 unfavourable

Question 13

Productivity measures the relationship between actual inputs used (both quantities and costs)and standard outputs produced.

Accepted Answer

A) True 
 B)False

Question 14

Learning and growth perspective identifies the capabilities in which the organization must excel to achieve superior internal processes that create value for customers and shareholders.

Accepted Answer

A) True 
 B)False

Question 15

According to Michael Porter which of the following is a force that shapes an organization's competitive environment?

Accepted Answer

A) investors 
B) potential entrants into the market 
C) lenders 
D) research and development 
E) bankers 
A) investors 
B) potential entrants into the market 
C) lenders 
D) research and development 
E) bankers

Question 16

Bosely Corporation is reviewing its business strategy.The first step for Bosely is to evaluate the competitive environment.You have been hired to help the company go through the strategy formulation process.Required:
To perform the analysis of competitive rivalry, what areas should Bosely focus on and give at least one example of how Bosely can effectively deal with each area.

Accepted Answer

The industry analysis is composed of fiv

Question 17

Employee satisfaction is a measure of the internal business process perspective of the balanced scorecard.

Accepted Answer

A) True 
 B)False

Question 18

An analysis of Louis Brown Corporation's operating income changes between year 1 and year 2 show the following:
   Required:
Is Louis Brown's operating income gain consistent with the product differentiation or cost leadership strategy? Explain briefly.

Accepted Answer

Louis Brown's operating income gain is c

Question 19

________ measures the relationship between actual inputs used and actual outputs achieved.

Accepted Answer

A) Total factor productivity 
B) Partial productivity 
C) Productivity 
D) Product yield variance 
E) Labour yield 
A) Total factor productivity 
B) Partial productivity 
C) Productivity 
D) Product yield variance 
E) Labour yield

Question 20

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 learning and growth perspective?

Accepted Answer

A) operating income growth from charging higher margins for XX 300 
B) market share in the high-end appliance market 
C) order delivery time 
D) number of employees trained in quality management 
E) customer satisfaction 
A) operating income growth from charging higher margins for XX 300 
B) market share in the high-end appliance market 
C) order delivery time 
D) number of employees trained in quality management 
E) customer satisfaction

An organization that is using the cost leadership approach would

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

To evaluate the success of its strategy, a company can subdivide the change in costs into growth, price-recovery and productivity components.

Downsizing is also called rightsizing.

What is the direct manufacturing labour partial productivity, assuming 10,000 units were produced during the year and 40,000 direct manufacturing labour-hours were used?

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?

Productivity measures the relationship between actual inputs used (both quantities and costs)and standard outputs produced.

Learning and growth perspective identifies the capabilities in which the organization must excel to achieve superior internal processes that create value for customers and shareholders.

According to Michael Porter which of the following is a force that shapes an organization's competitive environment?

Employee satisfaction is a measure of the internal business process perspective of the balanced scorecard.

An analysis of Louis Brown Corporation's operating income changes between year 1 and year 2 show the following: Required: Is Louis Brown's operating income gain consistent with the product differentiation or cost leadership strategy? Explain briefly.

________ measures the relationship between actual inputs used and actual outputs achieved.

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets, Variances, and Management Control: I

Flexible Budgets, Variances, and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Analysis of Cost Behaviour

Decision Making and Relevant Information

Pricing Decisions, Product Profitability Decisions, and Cost Management

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Process Costing

Spoilage, Rework, and Scrap

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters

Exam 13: Strategy, Balanced Scorecard, and Profitability Analysis

An organization that is using the cost leadership approach would

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

To evaluate the success of its strategy, a company can subdivide the change in costs into growth, price-recovery and productivity components.

Downsizing is also called rightsizing.

What is the direct manufacturing labour partial productivity, assuming 10,000 units were produced during the year and 40,000 direct manufacturing labour-hours were used?

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?

Productivity measures the relationship between actual inputs used (both quantities and costs)and standard outputs produced.

Learning and growth perspective identifies the capabilities in which the organization must excel to achieve superior internal processes that create value for customers and shareholders.

According to Michael Porter which of the following is a force that shapes an organization's competitive environment?

Employee satisfaction is a measure of the internal business process perspective of the balanced scorecard.

An analysis of Louis Brown Corporation's operating income changes between year 1 and year 2 show the following: Required: Is Louis Brown's operating income gain consistent with the product differentiation or cost leadership strategy? Explain briefly.

________ measures the relationship between actual inputs used and actual outputs achieved.

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets, Variances, and Management Control: I

Flexible Budgets, Variances, and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Analysis of Cost Behaviour

Decision Making and Relevant Information

Pricing Decisions, Product Profitability Decisions, and Cost Management

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Process Costing

Spoilage, Rework, and Scrap

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters