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36) Ellingson Company has budgeted sales of $487,500 with the following budgeted costs: Direct materials$105,000 Compute the target profit percentage for setting prices as a percentage of: 37) Timothy Company has budgeted sales of $780,000 with the following budgeted costs: Direct materials$168,000 Compute the average markup percentage for setting prices as a percentage of:.
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12.4   Price products using the target-costing approach. 1) Value engineering is a time-and-motion system that can result in: improvements in product designs, changes in material specifications, or modifications in process methods. 2) Financial reporting systems emphasize cost incurrence by recognizing and recording costs only when a resource is sacrificed or consumed. 3) Locked-in.
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41) Distance Company has been unhappy with the financial accounting variances that its cost accounting system has been producing, because its managers believe that there is more to evaluating an operation than just examining accounting numbers. Therefore, it has started gathering data to assist in the examination of nonfinancial results.
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31) The average number of student credit hours taught per faculty member is an example of A) an expected performance measure. B) a budgeted productivity measure. C) a standard productivity measure. D) a partial productivity measure. E) a total factor productivity measure. 32) Frazier Company provided the following information: Budgeted input 19,500 litres Actual input 17,900 litres Budgeted production 20,000 units Actual production 19,000.
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13.3   Understand the four perspectives of the balanced scorecard. 1) The accounting scorecard translates an organization's mission and strategy into a comprehensive set of performance measures that provides the framework for implementing its strategy. 2) The internal business process perspective focuses on internal operations that further both the customer perspective by creating.
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11) To encourage the design of products that are simpler to manufacture or less costly to service, would be an example of which cost allocation purpose? A) to provide information for economic decisions B) to motivate managers and employees C) to determine employees' wages D) to measure income and assets for reporting to external.
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11) A product's markup percentage would need to cover fixed manufacturing costs if A) the company has only fixed manufacturing costs. B) the company wants to break-even during the fiscal period. C) the company wants to make a profit. D) the cost base does not include fixed manufacturing costs. E) the cost base includes fixed.
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13.5   Analyze the results from specific productivity and capacity control strategies to achieve BSC expectations. 1) Engineered costs result specifically from a clear cause-and-effect relationship between output and the resources needed to produce that output. 2) Discretionary costs arise from periodic (usually yearly) decisions regarding the maximum amount to be incurred. 3) Uncertainty.
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11) Valley West Amusement Park is evaluating its ticket prices. It is open during the summer months for 15 weeks. The following information pertains to last year's tourist season. Costs are expected to remain the same for this year. Average tourists per day on Friday thru Tuesday2,500 Required: What is the unit cost.
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43) Required: a.What amount is the revenue effect of price recovery component? b.What amount is the cost effect of price recovery component? c.What is the change in income as a result of the price recovery component? 44) Required: What is the amount of the productivity component? 45) Required: Present the following, a.The change in operating income from.
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  13.1   Explain how the relative strength of competitive forces help managers identify strategic alternatives. 1) Strategies have been classified in many different ways, but what is common is to set the business within its external environment. 2) Cost leadership is an organization's ability to offer products or services that are perceived by.
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12.6   Use life-cycle budgeting and costing when making pricing decisions. 1) A business that engages in predatory pricing violates Canadian law. 2) Dumping occurs when a company is trying to get rid of out-of-style products and substantially reduces their prices. 3) Collusive pricing occurs when companies in an industry conspire in their pricing.
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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. Year 1 Year 2 Units of AP15 produced and sold 20,000 21,000 Selling price $200 $220 Direct materials (square metres) 60,000 61,500 Direct materials costs per.
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21) Melik Company provided the following information: Budgeted input 12,000 kilograms Actual input 15,000 litres Budgeted production 5,000 units Actual production 4,750 units What is the partial productivity ratio? 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 22) Which of the following statements is TRUE concerning productivity? A) The.
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46) Define engineered and discretionary costs and give two examples of each. 47) Can a company identify unused capacity and, if so, how can unused capacity be managed? 48) Ralph Company has been very aggressive in developing various types of financial and nonfinancial measurement schemes to help with the evaluation.
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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. Year 1 Year 2 Units of XX 300 produced and sold 10,000 10,800 Selling price $100 $115 Direct materials (litres) 30,000 31,900 Direct materials costs per litre $15 $16 Manufacturing capacity for XX.
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45) Granger Electronics Ltd. manufactures a variety of high quality electronic components. Data from the last three months are presented below: April May June Direct materials partial productivity 0.75 0.76 0.77 Overtime hours worked 60 65 62 Defect rate 1.00% 0.95% 0.92% On time delivery 97.0% 97.3% 97.0% Set up time (average in hours) 5.90 5.85 5.80 Number of machine breakdowns 3 2 2 Downtime (hours) 15.0 11.5 11.0 Number of products returned 5 4 3 Throughput time (hours) 10.0 9.8 9.5 You are the new assistant controller for.
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39) An analysis of Louis Brown Corporation's operating income changes between year 1 and year 2 show the following: Operating income for Year 1$1,000,000 Add growth component30,000 Add price-recovery component200,000 Deduct productivity component  (10,000) Operating income for Year 2$1,220,000 Required: Is Louis Brown's operating income gain consistent with the product differentiation or cost leadership strategy? Explain briefly. 40).
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13.4   Evaluate strategic success at implementing a cost leadership strategy using balanced scorecard measures. 1) The growth component measures the increase in revenues minus the increase in costs from selling more units of a product. 2) The productivity component measures the reduction in costs attributable to a reduction in the quantity of.
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34) Ski Vallet provides materials that let people teach themselves how to snow ski. It has six different skill-level programs. Each one includes visual and audio learning aids along with a workbook that can be submitted to the company for grading and evaluation purposes, if the person so desires. The accounting.
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45) Steven Corporation manufactures fishing poles that have a price of $21.00. It has costs of $16.32. A competitor is introducing a new fishing pole that will sell for $18.00. Management believes it must lower the price to $18.00 to compete in the highly cost-conscious fishing pole market. Marketing believes.
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51) Required: a.What amount is the revenue effect of the growth component? b.What amount is the cost effect of the growth component? c.What is the net effect on operating income as a result of the growth component? 52) Required: a.What amount is the revenue effect of the price-recovery component? b.What amount is the cost effect of.
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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: Year 1Year 2 Units of II300 produced and sold50,00055,000 Selling price$40$46 Direct materials (kilograms)150,000151,625 Direct materials costs per kilogram $6.00$6.50 Manufacturing capacity.
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27) 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.
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Answer the following question(s) using the information below. After conducting a market research study, Schultz Manufacturing decided to produce a new interior door to complement its exterior door line. It is estimated that the new interior door can be sold at a target price of $60. The annual target sales volume.
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  14.1   Apply relevance as a criterion to decide how to allocate non-manufacturing (period) costs. 1) The allocation of one particular cost must satisfy all four justifications of cost allocation. 2) Indirect costs typically constitute a large percentage of the costs assigned to cost objects. 3) Full product costing requires the recovery of all.
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Match each of the following balanced scorecard measures with the appropriate perspective. A) learning and growth perspective B) customer perspective C) financial perspective D) internal business process perspective 31) service response time Diff: 2    Type: MA Skill:  Understand Objective:  LO 13-3 32) market share Diff: 2   Type: MA Skill:  Understand Objective:  LO 13-3 33) gross margin percentage Diff: 2    Type: MA Skill:  Understand Objective:  LO 13-3 34).
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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. Year 1 Year 2 Units of AP15 produced and sold 20,000 21,000 Selling price $200 $220 Direct materials (square metres) 60,000 61,500 Direct materials costs per.
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13.2   Understand reengineering. 1) Strategy requires integration of product and process development. 2) To achieve a cost leadership strategy companies may need to improve their internal production processes to increase yield. 3) Reengineering is the fundamental rethinking and redesign of business processes to achieve improvements in critical measures of performance such as cost,.
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21) Knowledge Transfer Associates is in the process of evaluating its new client services for the business systems consulting division. A) $206,250 B) $162,500 C) $(43,750) D) $(87,500) E) $412,500 22) The life-cycle reporting process A) is the same as traditional accounting reporting. B) matches the company's normal fiscal year reporting. C) usually includes several accounting reporting periods. D).
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44) Ranger Electronics Ltd. manufactures a variety of high quality electronic components. Data from the last three months are presented below: April May June Direct materials partial productivity 0.85 0.86 0.87 Overtime hours worked 80 75 72 Defect rate 2.00% 1.95% 1.92% On time delivery 98.0% 98.3% 98.0% Set up time (average in hours) 6.90 6.85 6.80 Number of machine breakdowns 2 1 1 Downtime (hours) 12.0 11.5 11.25 Number of products returned 6 5 4 Throughput time (hours) 12.0 11.8 11.5 You are the new assistant controller for.
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21) Measures of the balanced scorecard's customer perspective include all of the following EXCEPT A) market share. B) customer satisfaction. C) number of new customers. D) employee training on new products. E) number of repeat customers. 22) Measures of the balanced scorecard's internal business process perspective include all of the following EXCEPT A) operating capabilities. B) number of.
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48) Required: a.What amount is the revenue effect of the price-recovery component? b.What amount is the cost effect of the price-recovery component? c.What is the net effect on operating income as a result of the price-recovery component? d.What is the net effect on operating income as a result of the productivity component? 49) Required: Present.
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12.5   Price products using the cost-plus approach. 1) Including unit fixed costs for pricing is often used because of its simplicity. 2) The target rate of return on investment is the target operating income that an organization must earn divided by invested capital. 3) Survey evidence suggest that most companies use which type.
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38) Electronics Inc. has been unhappy with the financial accounting variances that its cost accounting system has been producing, because its managers believe that there is more to evaluating an operation than just examining accounting numbers. Therefore, it has started gathering data to assist in the examination of nonfinancial results.
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12.3   Understand how companies make long-run pricing decisions. 1) When prices are set in a competitive marketplace, product costs are the most important influence on pricing decisions. 2) Companies that produce high quality products do not have to pay attention to the actions of their competitors. 3) Relevant costs for pricing decisions.
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Answer the following question(s) using the information below. After conducting a market research study, Potter Products decided to produce an electric coffee pot to complement its line of kitchen products. It is estimated that the new coffee pot can be sold at a target price of $46. The annual target sales.
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14) The Maize Eagles are evaluating ticket prices for its basketball games. Studies show that Friday and Saturday night games average more than twice the fans of games on other days. The following information pertains to the stadium's normal operations per season: Average fans per game (all games)2,500 fans The stadium is.
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31) ________ measures the reduction in costs attributable to a reduction in the quantity of inputs used in year two relative to the quantity of inputs that would have been used in year one to produce the year two output. A) The growth component B) The price-recovery component C) The productivity component D) The.
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31) Stone and Bicker are starting a new business venture and are in the process of evaluating their product lines. Information for one new product, hand-made lamps, is as follows: Required: a.What are the estimated life-cycle revenues? b.What is the estimated life-cycle operating income if the product life cycle is one year? 32).
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59) Required: Present the following, a.The change in operating income from cost leadership. b.The change in operating income due to industry wide effects. c.The effect of product differentiation on operating income and a summarization of the change in operating income between Year 1 to Year 2. 60) Describe three key components in doing a strategic.
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11) Identify and explain Porter's Five Forces model. 12) Explain the product differentiation and the cost leadership strategies. 13) 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.
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