Question : SHORT ANSWER. Write the word or phrase that best completes each : 1196081

 

SHORT ANSWER.

Write the word or phrase that best completes each statement or answers the question. 82)

Maloney Corporation manufactures plastic water bottles. It plans to grow by producing high-quality

water bottles at a low cost that are delivered in a timely manner. There are a number of other

manufacturers who produce similar water bottles. Maloney believes that continuously improving its

manufacturing processes and having satisfied employees are critical to implementing its strategy.

 

Required:

a.Is Maloney’s strategy one of product differentiation or cost leadership?

Explain briefly.

 

Identify at least one key element that you would expect to see included in the balanced scorecard

 

b.for the financial perspective.

c.for the customer perspective.

d.for the internal business process perspective.

e.for the learning and growth perspective.

 82)

_____________

83)

An analysis of Louis Brown Corporation’s operating income changes between 2003 and 2004 show the following:

 

Operating income for 2003$1,000,000

Add growth component30,000

Add price-recovery component200,000

Deduct productivity component

(10,000)

Operating income for 2004$1,220,000

 

Required:

 

Is Louis Brown’s operating income gain consistent with the product differentiation or cost leadership strategy? Explain briefly. 83)

_____________

84)

An analysis of Gardner Corporation’s operating income changes between 2005 and 2006 show the

following:

 

Operating income for 2005              $1,000,000

Add growth component              50,000

Deduct price-recovery component              (30,000)

Add productivity component             

 

120,000

Operating income for 2006              $1,140,000

 

Required:

Is Gardner’s operating income gain consistent with the product differentiation or cost leadership strategy? Explain briefly.

 

 84)

_____________

85)

An analysis of Gardner Corporation’s operating income changes between 2003 and 2004 show the following:

 

Operating income for 2003$1,000,000

Add growth component50,000

Deduct price-recovery component(30,000)

Add productivity component

120,000

Operating income for 2004$1,140,000

 

Required:

 

Is Gardner’s operating income gain consistent with the product differentiation or cost leadership strategy? Explain briefly. 85)

_____________

86)

Following a strategy of product differentiation, Despotovich Corporation makes a high-end Computer Monitor, CM12. The company presents the following data for the years 20×1 and 20×2.

 

20x120x2

Units of CM12 produced and sold5,0005,500

Selling price $400$440

Direct materials (pounds)15,00015,375

Direct materials costs per kilogram $40$44

Manufacturing capacity for CM12 (units)10,00010,000

Total manufacturing conversion costs$1,000,000 $1,110,000

Manufacturing conversion costs per unit of capacity$50$55

Selling and customer-service capacity (customers)6058

Total selling and customer-service costs$360,000$362,500

Cost per customer of selling & customer-service capacity$3,000$3,125

 

Despotovich Corporation produces no defective units but it wants to reduce direct materials usage per unit of CM12 in 20×2. Manufacturing conversion costs in each year depend on production capacity defined in terms of CM12 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. Despotovich Corporation has 46 customers in 20×1 and 50 customers in 20×2. The industry market size for high-end computer monitors increased 5% from 20x1to 20×2.

 

Required:

 

a.Which of the following is a measure of the financial perspective?

b.Which of the following is a measure of the customer perspective?

c.Which of the following is a measure of the internal business perspective?

d.Which of the following is an objective of the learning and growth perspective? 86)

_____________

87)

Following a strategy of product differentiation, Instruments, Inc. makes a hand held calculator, II400. Instruments, Inc. presents the following data for the years 20×1 and 20×2.

 

20x120x2

Units of II400 produced and sold50,00052,500

Selling price$40$44

Direct materials (pounds)150,000153,375

Direct materials costs per kilogram$4.00$4.40

Manufacturing capacity for II400 (units)62,50062,500

Total manufacturing conversion costs$250,000$277,500

Manufacturing conversion costs per unit of capacity$8.00$8.80

Selling and customer-service capacity (customers)3029

Total selling and customer-service costs$180,000$181,250

Cost per customer of selling & customer-service capacity$12,000$12,500

 

Instruments, Inc. produces no defective units but it wants to reduce direct materials usage per unit of II400 in 20×2. Manufacturing conversion costs in each year depend on production capacity defined in terms of II400 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. Instruments, Inc. has 23 customers in 20×1 and 25 customers in 20×2. The industry market size for hand held calculators increased 5% from 20x1to 20×2.

 

Required:

 

a.Which of the following is an objective of the internal business perspective?

b.Which of the following is a measure of the learning and growth perspective?

c.Which of the following is a measure of the financial perspective?

d.Which of the following is a measure of the customer perspective? 87)

_____________

Use the information below to answer the following question(s).

 

Following a strategy of product differentiation, Despotovich Corporation makes a high-end Computer Monitor, CM12. Despotovich Corporation presents the following data for the years 20×1 and 20×2.

 

20x120x2

Units of CM12 produced and sold5,0005,500

Selling price$400$440

Direct materials (pounds)15,00015,375

Direct materials costs per kilogram $40$44

Manufacturing capacity for CM12 (units) 10,00010,000

Total manufacturing conversion costs$1,000,000$1,110,000

Manufacturing conversion costs per unit of capacity $50$55

Selling and customer-service capacity (customers)60 58

Total selling and customer-service costs $360,000$362,500

Cost per customer of selling & customer-service capacity $3,000$3,125

 

Despotovich Corporation produces no defective units but it wants to reduce direct materials usage per unit of CM12 in 20×2. Manufacturing conversion costs in each year depend on production capacity defined in terms of CM12 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. Despotovich Corporation has 46 customers in 20×1 and 50 customers in 20×2 . The industry market size for high-end computer monitors increased 5% from 20×1 to 20×2.

88)

Required:

 

a.What is the operating income for

20×1?

b.What is operating income in 20×2 ?

c.What is the change in operating income from 20x1to 20×2? 88)

_____________

89)

Required:

 

a.What is revenue effect of growth component?

b.What is the cost effect of growth component?

c.What is the net increase in operating income as a result of the growth component? 89)

_____________

90)

Following a strategy of product differentiation, Ernsting Corporation makes a high-end computer

monitor, CM12.

Ernsting Corporation presents the following data for the years 2007 and 2008:

 

20072008

Units of CM12 produced and sold5,0005,500

Selling price$400$440

Direct materials (pounds)15,00015,375

Direct materials costs per pound$40$44

Manufacturing capacity for CM12 (units)10,00010,000

Conversion costs$1,000,000$1,100,000

Conversion costs per unit of capacity$100$110

Selling and customer-service capacity (customers)6058

Total selling and customer-service costs$360,000$362,500

Selling and customer-service capacity cost per customer$6,000$6,250

 

Ernsting Corporation produces no defective units but it wants to reduce direct materials usage per unit of CM12 in 2008.

Manufacturing conversion costs in each year depend on production capacity defined in terms of CM12 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 46 customers in 2007 and 50 customers in 2008.

The industry market size for high-end computer monitors increased 5% from 2007 to 2008.

 

Required:

a.What is operating income for 2007?

b.What is operating income in 2008?

c.What is the change in operating income from 2007 to 2008?

 

 90)

_____________

91)

Following a strategy of product differentiation, Ernsting Corporation makes a high-end computer

monitor, CM12.

Ernsting Corporation presents the following data for the years 2007 and 2008:

 

20072008

Units of CM12 produced and sold5,0005,500

Selling price$400$440

Direct materials (pounds)15,00015,375

Direct materials costs per pound$40$44

Manufacturing capacity for CM12 (units)10,00010,000

Conversion costs$1,000,000$1,100,000

Conversion costs per unit of capacity$100$110

Selling and customer-service capacity (customers)6058

Total selling and customer-service costs$360,000$362,500

Selling and customer-service capacity cost per customer$6,000$6,250

 

Ernsting Corporation produces no defective units but it wants to reduce direct materials usage per unit of CM12 in 2008.

Manufacturing conversion costs in each year depend on production capacity defined in terms of CM12 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 46 customers in 2007 and 50 customers in 2008.

The industry market size for high-end computer monitors increased 5% from 2007 to 2008.

 

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?

 91)

_____________