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Directions: Answer all the questions. Be sure to...




Directions: Answer all the questions. Be sure to show how you did your calculations. Question #1 The ABC Company manufactures widgets. It competes and plans to grow by selling high-quality widgets at low prices and by delivering them to customers quickly. There are many other companies in the industry producing similar widgets. ABC believes it needs to continuously improve its manufacturing and delivery processes and that having satisfied employees are both critical to its long-term success. a) Based on this information, what type of strategy to you believe ABC is pursuing? Be sure to back up your claim with specific evidence. b) List and justify eight metrics (2 in each of the Balanced Scorecard perspectives) that you believe ABC should include in its Balanced Scorecard. c) ABC calculates the following figures: 2011 operating income $1,850,000 2012 operating income $2,013,000 Growth component $85,000 Price-recovery component ($72,000) Productivity component $150,000 In addition, the market for widgets did not grow in 2012, input process did not change in 2012, and ABC reduced its selling price in 2012. Based on this information, do you believe ABC?s increase in operating income in 2012 is consistent with the strategy you identified in part a? Be sure to justify your answer with specific information. Question #2 Assume the CFO of your organization approaches you to ask your advice about implementing the Balanced Scorecard at your organization. a) List and describe the four perspectives of the Balanced Scorecard. b) What steps would you encourage him or her to take in order to successfully implement the Scorecard? c) What roadblocks would you encourage him or her to avoid in order to successfully implement the Scorecard? Question #3 List and describe two types of costs for each of the four categories of quality costs. Question #4 Consider the following quality cost report: Year 1 Year 2 Year 3 Prevention $950 $1,065 $995 Appraisal $1,250 $1,100 $900 Internal failure $875 $925 $975 External failure $1,400 $1,500 $1,625 Total quality costs $4,475 $4,590 $4,495 Total revenues $25,000 $26,500 $27,775 Year 1 Year 2 Year 3 % of Rev % of Qual Costs % of Rev % of Qual Costs % of Rev % of Qual Costs Prevention 3.80% 21.23% 4.02% 23.20% 3.58% 22.14% Appraisal 5.00% 27.93% 4.15% 23.97% 3.24% 20.02% Internal failure 3.50% 19.55% 3.49% 20.15% 3.51% 21.69% External failure 5.60% 31.28% 5.66% 32.68% 5.85% 36.15% TOTAL 17.90% 100.00% 17.32% 100.00% 16.18% 100.00% Do you believe this firm?s quality initiatives have been successful? Be sure to justify your opinion with specific information from the quality report. Question #5 In your own words, explain the Theory of Constraints. As part of your answer, be sure to mention the basic assumptions underlying it, strengths of the method, and weaknesses of the method. Question #6 a) What is decentralization? b) List and describe three potential benefits and three potential problems with decentralization. Question #7 a) What is a transfer price? b) How can firms use transfer prices strategically? c) What role does GAAP play in how firms determine transfer prices? Question #8 a) What is goal incongruence? b) How can using the metric ?return on investment? for performance evaluation lead to goal incongruence? c) What can a firm do to reduce goal incongruence caused by using ?return on investment? for performance evaluation? Question #9 Consider the following information about a potential project: Investment required $2,000,000 Expected annual project revenue $3,600,000 Expected annual project expenses $3,200,000 Required rate of return 12% Current division return on investment 18% a) Calculate the project?s return on investment. b) Based solely on ROI, is this project in the firm?s best interests? Why or why not? c) Is this project in the division manager?s best interests? Why or why not? d) Perform DuPont Analysis on this project e) What is the project?s residual income?,What time would the assignment be ready?,I think it must be a misunderstanding, the assignment was due today 09/11/12 at 10:00 a.m. eastern time. What time do you have this is due?,OK


Paper#6528 | Written in 18-Jul-2015

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