31) What is the cost effect of the growth component for conversion costs? 31)

A) $10 000 F B) Zero C) $10 000 U D) $12 500 U

32) Measures of the balanced scorecard's learning-and-growth perspective include: 32)

A) customer-retention percentage

B) economic value added

C) employee satisfaction ratings

D) time taken to deliver a product to customers

 

33) The revenue effect of growth is calculated by multiplying the difference in units sold (current year

minus the previous year) by:

33)

A) selling price in the previous year B) selling price in the current year

C) gross profit in the current year D) gross profit in the previous year

 

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34) Measures of the balanced scorecard's customer perspective include: 34)

A) employee satisfaction ratings B) market share

C) number of process improvements D) revenue growth

 

35) Manufacturing cycle efficiency is an example of a balanced-scorecard measure of the: 35)

A) internal business process perspective B) customer perspective

C) learning and growth perspective D) financial perspective

 

36) Conversion costs are an example of: 36)

A) direct engineered costs B) unused capacity costs

C) discretionary costs D) indirect engineered costs

 

37) A high level of precision between resources used and output produced exists with: 37)

A) engineered costs

B) discretionary costs

C) both engineered and discretionary costs

D) neither engineered nor discretionary costs

 

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Answer the following questions using the information below:

Mitsufugi Company makes a kitchen appliance with model number KA450. The goal for 2014 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 KA450 units that can be produced. The industry market size for appliances increased 5% from 2013 to

2014. The following additional data are available for 2013 and 2014:

2013 2014

Units of KA450 produced and sold 10 000 10 300

Selling price $150 $145

Direct materials (square metres) 30 000 29 000

Direct material costs per square metre $12 $13

Manufacturing capacity for KA450 (units) 12 500 12 000

Total conversion costs $250 000 $240 000

Conversion costs per unit of capacity $20 $20

38) What is the net effect on operating profit as a result of the growth component? 38)

A) operating profit decreased due to increased market share

B) operating profit decreased due to industry growth

C) operating profit increased due to industry growth

D) operating profit increased due to increased market share

39) An analysis of Kookaburra Ltd's operating profit for the last two years showed the following:

Operating profit for 2013 $600 000

Add growth component 15 000

Add price-recovery component 100 000

Deduct productivity component (8000)

Operating profit for 2014 $707 000

This gain in operating profit is consistent with a:

39)

A) downsizing strategy B) reengineering strategy

C) cost leadership strategy D) product differentiation strategy

 

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40) Downsizing: 40)

A) may include eliminating jobs

B) is most difficult with discretionary costs

C) should be done within the context of a company's overall strategy

D) All of these answers are correct.

 

 

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