Question 1

Toomey Toolworks Co.has provided the following information for last year: 
$$\begin{array} { | l | r | l | } 
\hline \text { Tons of metal input } & 20,000 & @ \$ 15 \text { ton } \
\hline \text { Labor hours } & 15,000 & @ \$ 30 \text { hour } \
\hline \text { Overhead costs } & \$ 225,000 & \
\hline \begin{array} { l } 
\text { Tons of forging } \
\text { produced }
\end{array} & 16,000 & \begin{array} { l } 
@ \text { selling price of } \
\$ 75 \text { ton }
\end{array} \
\hline
\end{array}$$The total factor productivity measure is:

Accepted Answer

A)  1.231. 
B)  1.600. 
C)  2.167. 
D)  3.250.

Question 2

Granite Manufacturing produces high-end furniture products for the luxury hotel industry.Granite 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 Granite 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,Granite 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 balanced scorecard for Granite Manufacturing with 3-4 perspectives and 3-4 quantitative critical success factors in each perspective.

Accepted Answer

The answer of Granite Manufacturing produces high-end furniture products for...

Question 3

Shuster Metalworks Co.has provided the following information for last year:$$\begin{array} { | l | r | l | } 
\hline \text { Pounds of metal input } & 21,000 & @ \$ 12 \text { pound } \
\hline \text { Labor hours } & 8,000 & @ \$ 25 \text { hour } \
\hline \text { Overhead costs } & \$ 165,000 & \
\hline \begin{array} { l } 
\text { Pounds of output } \
\text { produced }
\end{array} & 12,000 & \begin{array} { l } 
@ \text { selling price of } \
\$ 70 \text { pound }
\end{array} \
\hline
\end{array}$$
Required:
Calculate the total factor productivity measure.

Accepted Answer

The answer of Shuster Metalworks Co.has provided the following information...

Question 4

The Otero Manufacturing Company collected the following information (in days):
$$\begin{array} { | l | r | } 
\hline & \text { April } \
\hline \text { Transporting product } & 2.0 \
\hline \text { Processing product } & 14.0 \
\hline \text { Inspecting product } & 0.5 \
\hline \text { Storing product } & 6.0 \
\hline
\end{array}$$ What is the manufacturing cycle time?

Accepted Answer

A)  14.0 days. 
B)  16.0 days. 
C)  22.0 days. 
D)  22.5 days.

Question 5

Mountainburg Corporation keeps careful track of the time required to fill orders.The times recorded for a particular order appear below: 
$$\begin{array} { | l | c | } 
\hline & \text { Hours } \
\hline \text { Processing Time } & 1.2 \
\hline \text { Inspection Time } & 0.3 \
\hline \text { Moving Time } & 3.8 \
\hline \text { Storing Time } & 4.2 \
\hline
\end{array}$$The manufacturing cycle time was:

Accepted Answer

A)  5.3 hours. 
B)  20.7 hours. 
C)  15.4 hours. 
D)  9.5 hours.

Question 6

Which of the following performance measures would be used to evaluate the personnel department performance?

Accepted Answer

A)  Number of product recalls. 
B)  Percentage of late deliveries. 
C)  Number of requests for transfers. 
D)  Length of time to fill vacant positions.

Question 7

The Alma Milling Co.has the following information for last year: 
$$\begin{array} { | l | r | } 
\hline \text { Material input } & 6,864,000 \
\hline \text { Yards of output produced } & 1,311,000 \
\hline
\end{array}$$The partial productivity for materials is:

Accepted Answer

A)  0.131. 
B)  0.191. 
C)  0.686. 
D)  5.236.

Question 8

Which of the following balanced scorecard perspectives focuses on quality and process improvement?

Accepted Answer

A)  Financial. 
B)  Customer. 
C)  Internal Business Process. 
D)  Learning and growth.

Question 9

Divisional managers of Crusing Incorporated have been expressing growing dissatisfaction with the current methods used to measure divisional performance.Divisional operations are evaluated every quarter by comparison with the static budget prepared during the prior year.Divisional managers claim that many factors are completely out of their control but are included in this comparison.This results in an unfair and misleading performance evaluation.The managers have been particularly critical of the process used to establish standards and budgets.The annual budget,stated by quarters,is prepared six months prior to the beginning of the operating year.Pressure by top management to reflect increased earnings has often caused divisional managers to overstate revenues and/or understate expenses.In addition,once the budget had been established,divisions were required to "live with the budget." Frequently,external factors such as the state of the economy,changes in consumer preferences,and actions of competitors have not been adequately recognized in the budget parameters that top management supplied to the divisions.The credibility of the performance review is curtailed when the budget cannot be adjusted to incorporate these changes.Top management,recognizing the current problems,has agreed to establish a committee to review the situation and to make recommendations for a new performance evaluation system.The committee consists of each division manager,the Corporate Controller,and the Executive Vice President who serves as the chairman.At the first meeting,one division manager outlined an Achievement of Objectives System (AOS).In this performance evaluation system,divisional managers would be evaluated according to three criteria:
• Doing better than last year - Various measures would be compared to the same measures of the prior year.• Planning realistically - Actual performance for the current year would be compared to realistic plans and/or goals.• Managing current assets - Various measures would be used to evaluate the divisional management's achievements and reactions to changing business and economic conditions.A division manager believed this system would overcome many of the inconsistencies of the current system because divisions could be evaluated from three different viewpoints.In addition,managers would have the opportunity to show how they would react and account for changes in uncontrollable external factors.A second division manager was also in favor of the proposed AOS.However,he cautioned that the success of a new performance evaluation system would be limited unless it had the complete support of top management.Further,this support should be visible within all divisions.He believed that the committee should recommend some procedures which would enhance the motivational and competitive spirit of the divisions.Required:
(1)Explain whether or not the proposed AOS would be an improvement over the measure of divisional performance now used by Crusing Incorporated.(2)Develop specific performance measures for each of the three criteria in the proposed AOS which could be used to evaluate divisional managers.(3)Discuss the motivational and behavioral aspects of the proposed performance system.Also,recommend specific programs which could be instituted to promote morale and give incentives to divisional management.

Accepted Answer

The answer of Divisional managers of Crusing Incorporated have been...

Question 10

Which of the following balanced scorecard perspectives focuses on employee development?

Accepted Answer

A)  Financial. 
B)  Customer. 
C)  Internal Business Process. 
D)  Learning and growth.

Question 11

Explain how producing more units than can be sold can increase operating income.Would this be an issue in a service company or is it only an issue in a manufacturing environment? Could a company employ this strategy indefinitely to show continuous increases in profits?

Accepted Answer

The answer of Explain how producing more units than can...

Question 12

A balanced scorecard shows measures of performance as they related to areas of performance.Which of the following is a measure of performance of customer value?

Accepted Answer

A)  Gross margin ratio. 
B)  Retention of existing customers. 
C)  Hours of job related training. 
D)  Process cycle time.

Question 13

Karin Corporation keeps careful track of the time required to fill orders.The times required for a particular order appear below:$$\begin{array} { | l | r | } 
\hline & \text { Hours } \
\hline \text { Processing Time } & 0.6 \
\hline \text { Inspection Time } & 0.3 \
\hline \text { Moving Time } & 2.1 \
\hline \text { Storing Time } & 8.4 \
\hline
\end{array}$$ 
Required:
a.Determine the Manufacturing Cycle time.Show your work!
b.Determine the manufacturing cycle efficiency (MCE).Show your work!

Accepted Answer

The answer of Karin Corporation keeps careful track of the...

Question 14

Which of the following is a total factor productivity measure?

Accepted Answer

A)  Tons output/tons of material used. 
B)  Units produced/machine hour. 
C)  Sales value/total cost. 
D)  Gallons output/direct labor hour.

Question 15

Prancing Products has provided the following information for last year: 
$$\begin{array} { | l | r | l | } 
\hline \text { Gallons input } & 10,000 & @ \$ 15 \text { igallon } \
\hline \text { Labor hours } & 5,000 & @ \$ 20 \text { hhour } \
\hline \text { Overhead costs } & \$ 125,000 & \
\hline \text { Gallons finished } & 8,000 & @ \text { selling price of } \$ 55 \text { gallon } \
\hline
\end{array}$$The total factor productivity measure is:

Accepted Answer

A)  1.25. 
B)  1.60. 
C)  15.63. 
D)  1.17.

Question 16

Which of the following statements is(are)true regarding financial measures? (A)One disadvantage of using financial measures to evaluate performance is that they are typically reported on a monthly,quarterly,or annual basis.(B)One reason financial measures are used to evaluate performance is that they are easily quantifiable.

Accepted Answer

A)  Only A is true. 
B)  Only B is true. 
C)  Both A and B are true. 
D)  Neither A nor B is true.

Question 17

During the most recent month at Harrison Corporation,storing time was 3.0 days,inspection time was 0.8 day,processing time was 2.8 days,and moving time was 0.6 day.Required:
a.Compute the Manufacturing Cycle time.b.Compute the manufacturing cycle efficiency (MCE).c.What percentage of the production time is spent in non-value-added activities?

Accepted Answer

The answer of During the most recent month at Harrison...

Question 18

Which of the following balanced scorecard perspectives focuses on customer service issues?

Accepted Answer

A)  Financial. 
B)  Customer. 
C)  Internal Business Process. 
D)  Learning and growth.

Question 19

Indicate how the following concepts are used in the preparation of a balanced scorecard.Provide examples where appropriate.
(a)Leading indicators.
(b)Lagging indicators.
(c)Customer value.
(d)Causal model.

Accepted Answer

The answer of Indicate how the following concepts are used...

Question 20

Premier Products Co.has provided the following information for last year: 
$$\begin{array} { | l | r | r | } 
\hline \text { Material costs } & \$ 150,000 & \
\hline \text { Labor hours } & \$ 45,000 & \
\hline \text { Overhead costs } & \$ 117,000 & \
\hline \text { Product produced } & 8,000 &  @   \text { selling price of } \$ 45 i e a c h \
\hline
\end{array}$$The total factor productivity measure is:

Accepted Answer

A)  $150,000. 
B)  $312,000. 
C)  1.154. 
D)  0.832.

Exam 18: Performance Measurement to Support Business Strategy

Which of the following performance measures would be used to evaluate the personnel department performance?

The Alma Milling Co.has the following information for last year: $\begin{array} { | l | r | } \hline \text { Material input } & 6,864,000 \\\hline \text { Yards of output produced } & 1,311,000 \\\hline\end{array}$ The partial productivity for materials is:

Which of the following balanced scorecard perspectives focuses on quality and process improvement?

Which of the following balanced scorecard perspectives focuses on employee development?

Explain how producing more units than can be sold can increase operating income.Would this be an issue in a service company or is it only an issue in a manufacturing environment? Could a company employ this strategy indefinitely to show continuous increases in profits?

A balanced scorecard shows measures of performance as they related to areas of performance.Which of the following is a measure of performance of customer value?

Which of the following is a total factor productivity measure?

Which of the following balanced scorecard perspectives focuses on customer service issues?

Indicate how the following concepts are used in the preparation of a balanced scorecard.Provide examples where appropriate. (a)Leading indicators. (b)Lagging indicators. (c)Customer value. (d)Causal model.