New Semester
Started
Get
50% OFF
Study Help!
--h --m --s
Claim Now
Question Answers
Textbooks
Find textbooks, questions and answers
Oops, something went wrong!
Change your search query and then try again
S
Books
FREE
Study Help
Expert Questions
Accounting
General Management
Mathematics
Finance
Organizational Behaviour
Law
Physics
Operating System
Management Leadership
Sociology
Programming
Marketing
Database
Computer Network
Economics
Textbooks Solutions
Accounting
Managerial Accounting
Management Leadership
Cost Accounting
Statistics
Business Law
Corporate Finance
Finance
Economics
Auditing
Tutors
Online Tutors
Find a Tutor
Hire a Tutor
Become a Tutor
AI Tutor
AI Study Planner
NEW
Sell Books
Search
Search
Sign In
Register
study help
business
cost management strategic
Cost Management Strategies For Business Decisions 3rd Edition Michael W. Maher, Frank Selto Ronald W. Hilton - Solutions
20.55 Quattro Drive is considering improvements to its warehousing and distribution operations including a $400.000 purchase of robotic machinery with a useful life of five years. Other improvements entail the installation of new computing equipment and software at a start-up cost of $250,000 and
20.54 Bonanza Real Estate is considering enrolling in Rush Corp's Customer Value Seminar. a $2,000 per per- son, week-long intensive seminar that teaches sales staff to build customer satisfaction and loyalty and to sell products more effectively by understanding customers' needs. Rush Corp
20.53 Paragon Sports, a major sporting goods retailer, is considering upgrading its customer-support activities by improving online databases and training of customer-service personnel. Consider the following data:Current data: Annual sales Average cost of sales as percent of sales Sales growth.
20.52 As prices for many items have stabilized because of competition, some Internet-based retailers now ar competing on the basis of real-time customer service provided by live company representatives. Thes e-tailers report improved customer satisfaction, traffic, and sales growth that they
20.51 Toys, Inc. had been one of the leading Internet-based retailers of children's toys. However, in 2001 it generated a large loss, its stock price plummeted, and it declared bankruptcy. KB Toys purchased the company's website, a warehouse, and its customer list for $15 million. The following
20.50 Magnum Manufacturing rewards its key executives exclusively on return on investment (ROI). The vice president of administration suggests to the CEO that Magnum can increase its ROI by outsourcing most of its manufacturing and logistics activities to business partners and suppliers, thereby
20.49 Wannabe University (WU) is a medium-size public university with 15,000 students and 1,000 faculty members. The university built its national reputation on the excellence of its teaching and interactions with undergraduate students. Because government support of the university has dropped
20.48 In a small group, conduct an Internet search for an article published in the past three years that describes how an organization unsuccessfully designed or implemented its balanced scorecard. Prepare a five- minute presentation (with transparencies or PowerPoint slides) of your findings and
20.47 In a small group, conduct an Internet search for an article published in the past three years that describes how a real organization successfully designed and implemented its balanced scorecard. Prepare a five- minute presentation (with transparencies or PowerPoint slides) of your findings
20.46 Montpelier Co. conducts regular customer surveys to assess customer satisfaction with its products and postsale services, which is measured by averaging responses (from I highly unfavorable to 5 = highly favorable) on five variables that measure customer satisfaction with the company's
20.45 Trust Bank conducts regular customer surveys to assess its customer satisfaction, which is measured by averaging responses (from I highly unfavorable to 5 highly favorable) on five variables that mea- sure customers' satisfaction with the bank's services. Quantify Trust Bank's recent customer
20.44 Perform an Internet search for a comprehensive article on an actual organization's management of cus- tomer satisfaction or cultural differences. Prepare a five-minute presentation (with transparencies or PowerPoint slides) of your findings and how they relate to the chapter's coverage of
20.43 Review the Forms 10-K or annual reports for one company from each of the following industries: auto manufacturing, coffee and tea, and life insurance. (Hint: Use the SEC's EDGAR database.) Summarize how each of these organizations manages customer satisfaction.
20.41 Review the Forms 10-K or annual reports for the following companies (Hint: Use the SEC's EDGAR database.) Summarize how each of the following organizations manages customer satisfaction: Goodyear Tire & Rubber, a tire manufacturer, Abercrombie & Fitch, an apparel retailer; and Southwest
20.40 Arrange the following measures in an order that reflects their possible use as leading or lagging indicators of performance. Note that a measure of performance can itself be a leading indicator of later performance. Anticipation of customer needs Customer satisfaction Acquisition of new
20.39 Match each of the following performance measures to one or more of the four areas of a balanced score- card. Note that a performance measure can relate to more than one area.Performance Measures. Throughput time Return on sales Customer satisfaction Percent of sales dollars invested in
20.38 Match each of the following performance measures to one or more of the four areas of a balanced score- card. Note that a performance measure can relate to more than one area. Performance Measures Employee productivity Employee satisfaction Return on assets Customer satisfaction Employee
20.37 You are the chair of the board of directors of a large regional charitable organization that has been recognized nationally for outstanding public service. It has just lost its CEO to a profit-seeking firm poised for its initial pub- lic offering of shares. You must convene the board to
20.36 You are offered the general manager position at a large. mostly autonomous division of a very large company. The company is market driven and has 20 similar divi- sions in different industries. The division you are offered has performed poorly in the past, but it is in an industry with high
20.35 You are offered an executive position at a small high- technology company. The salary is considerably lower than your current salary, but after one year, you will be eligible for many stock options. Your only performance measure will be the company's stock price. What are the advantages and
20.33 (Appendix) The manager of an organization is having trouble getting employees to perform adequate work for the organization's benefit. "I pay them a good salary," says the manager, "and I give them big pay increases when I feel generous. I just can't figure out why they won't work harder.
20.32 "It is a bigger mistake to develop an unreliable balanced scorecard than never to build one at all." Do you agree with this statement! Why or why not?
20.31 Westinghouse Corporation formerly advertised that its employees are its most important assets. If that is true for Westinghouse (and presumably for other organizations. 100), why does its balance sheet (and presumably those of other organizations) not have a category of assets for employees?
20.29 Until recently the CEO of Xerox Corporation promi- nently stated in his letter to the company's annual reports that Xerox always strives to improve customer satisfac- tion. Xerox no longer makes this claim so prominently. Is it possible to create too much customer satisfaction? Explain. 20.30
20.27 A business executive says, "The financial area of a bal- anced scorecard indicates how the organization adds value to shareholders. I am involved with two organiza- tions; a small business that is a partnership with no shareholders, and a church that has no shareholders. A balanced scorecard
20.26 The chief operating officer of a nonprofit organization states, "It's all very well for a company like Sears to implement a balanced scorecard. It has measures in all four areas of the scorecard and has to satisfy stockhold-ers. Without a profit measure or motive in the last area of the
20.25 (Appendix) According to agency theory, what is the best incentive system?
20.24 (Appendix) What are the roles of an incentive system according to agency theory?
20.23 (Appendix) What is an intrinsic reward? How is an intrinsic reward different than an extrinsic reward? Are both necessary?
20.22 (Appendix) Explain how the expectancy chain can be broken, which reduces the effectiveness of an incentive system.
20.21 (Appendix) What are the two ingredients of a successful incentive system according to expectancy theory?
20.20 What are the different incentive effects of salary, cash bonus, stock, and stock options?
20.19 What are the advantages and disadvantages of making all rewards immediate and of deferring them?
20.18 What are the advantages and disadvantages of narrowly defining performance for evaluations? Of broadly defin- ing performance?
20.17 What is the possible relation between a balanced score- card and the use of financial and nonfinancial measures of performance?
20.16 What are the advantages and disadvantages of formula- based versus subjective performance evaluations?
20.15 Contrast absolute and relative performance evaluations.
20.14 What is the starting point in designing an effective incen- tive system?
20.13 Explain how an incentive system's design might create disincentives to desired behavior.
20.12 What are the key elements of an incentive system?
20.11 Why is "pay for performance" the foundation of incen- tive systems?
20.10 Explain how an increase in employee capabilities can flow through an organization and how the effects are reflected in a balanced scorecard.
20.9 Explain differences in balanced scorecards for profit- seeking and nonprofit organizations.
20.8 What is the difference between a set of leading and lag- ging indicators and a balanced scorecard?
20.7 Is financial performance important to all types of organi- zations, even nonprofits? Explain.
20.6 How can improvements in customer value affect finan- cial performance.
20.5 How can improvements in process efficiency affect cus- tomer value.
20.4 How can improvements in employee capabilities affect process efficiency,
20.3 How can employee capabilities be measured? Why is this important for improving efficiency, identifying opportunities, and preventing mistakes?
20.2 What is the difference between a leading and a lagging indicator of performance?
20.1 Review and define each of the chapter's key terms.
19.40 Gulliver's Travel, Ltd., has four operating divisions: airline, hotel, auto rental, and travel services. Each division is a separate segment for financial reporting purposes. Revenues and costs for the past year related to outside transactions were as follows (dollars in millions): Revenue
19.39 Eastern Safety Systems, Inc. (ESSI) consists of three subsidiary divisions-Boston Corporation. Raleigh Company, and Memphis Company that operate as if they were independent companies. Each division has its own sales force and production facilities. Each division management is responsible for
19.38 Global Corporation has two operating divisions in a semiautonomous organization structure. Division X, located in the United States, produces part XZ-1, which is an input to division Y, located in the south of France. Division X uses idle capacity to produce XZ-1, which has a domestic market
19.37 Worldwide Merchants Co-op (WMC) operates a fleet of container ships in international trade between Great Britain and Thailand. All of the shipping income (that is, that related to WMC's ships) is deemed as earned in Great Britain. WMC also owns a dock facility in Thailand that services WMC's
19.36 New England Window Corporation manufactures windows for the home-building industry. The frame division produces the window frames. It then transfers the frames to the glass division, which installs the glass and hardware. The company's best-selling product is a three-by-four-foot,
19.35 The Topeka Division (TD) of Great Plains Corporation, operating at capacity, has been asked by Jaydee division to supply it with electrical fitting no. 1726. TD sells this part to its regular customers for $7.50 each. Jaydee, which is operating at 50 percent capacity, is willing to pay $5
19.34 Eclipse Company's division S has an investment base of $600,000. The division produces and sells 90,000 units of a product at a market price of $10 per unit. Its variable costs total $3 per unit. The divi- sion also charges each unit with a share of fixed costs. The fixed cost is computed as
19.33 Universal Machine Tool, Inc. is a decentralized organization that evaluates division management based on measures of division contribution margin. Divisions L and N operate in similar product markets. Division L. produces a sophisticated electronic assembly that it can sell up to 140.000
19.32 Carlyle Corporation's Northwest Division produces electric motors, 20 percent of which Northwest Division sells to Carlyle's Redstone Division. It sells the remainder to outside customers. Carlyle treats its divisions as profit centers and allows division managers to choose their sources of
19.31 Down Under Corporation, based in Melbourne, Australia, has two operating divisions, an amusement park in Sydney and a hotel in Brisbane. The two divisions meet the Australian requirements for segment disclosures. Before transactions between the two divisions are considered, revenues and costs
19.30 Continental Lumber Corporation has two operating divisions. Its logging operation in Canada mills and ships logs to the United States where the company's building supplies division uses them. Operating expenses amount to $2 million in Canada and S6 million in the United States exclusive of
19.29 Piedmont Homes, Inc., has two divisions, building and financing. The building division oversees con- struction of single-family homes in "economically efficient" subdivisions. The financing division takes loan applications and packages mortgages into pools and sells them in the loan markets.
19.28 Outdoor Greenery, owned 60 percent by Kwasi Peterson and 40 percent by Maya Jefferies, grows speci- men plants for landscape contractors. The wholesale price of each plant is $15. During the past year, Outdoor sold 5,000 specimen plants. Of the plants sold last year, 1,000 were sold to Lively
19.27 Read "Is Wolverine Human? A Judge Answers No; Fans Howl in Protest." The Wall Street Journal, January 20, 2003, pp. Al, A5, by Neil King, Jr. Required What implications does this seemingly innocuous question have for tariffs and cost management at Toy Biz. Inc.? What are the implications for
19.26 Universal Electronics, Inc.. permits its decentralized units to "lease" space to one another. Division X has leased some idle warehouse space to division Y for $1.50 per square foot per month. Recently, divi- sion X obtained a new five-year contract, which will increase its production
19.25 Sacramento Transit, Ltd., operates a local mass transit system. The transit authority is a govemmental agency related to the state government. It has an agreement with the state government to provide rides to senior citizens for 10 cents per trip. The government reimburses Sacramento Transit
19.24 Use the Internet to explore international transfer-pricing policies by going to the Web site for the OECD (Organization for Economic Cooperation and Development) at www.oecd.org. Use the Search OECD Online function and enter transfer pricing when prompted for a word or phrase for which to
19.23 Edgeworth Box Company has two decentralized divisions, X and Y. Division X always has purchased certain units from division Y at $150 per unit. Because division Y plans to raise the price to $200 per unit, division X desires to purchase these units from outside suppliers for $150 per unit.
19.22 Refer to the preceding exercise. The fabrication division's full (absorption) cost of a component is $340. which includes $40 of applied fixed-overhead costs. The transfer price has been set at $374, which is the fabrication division's full cost plus a 10 percent markup.The assembly division
19.21 Peninsula Metals, Inc., has two divisions. The fabrication division transfers partially completed compo- nents to the assembly division at a predetermined transfer price. The fabrication division, which has a standard variable production cost per unit of $300, has no excess capacity and could
19.20 Intercoastal Company's Western Division has an opportunity to transfer component Z50 to the com- pany's Eastern Division. The Western Division, which offers its Z50 product to outside markets for $150, incurs variable costs of $55 per unit and fixed costs of $37,500 per month based on monthly
19.19 Seneca Associates is a real estate company operating in the Finger Lakes region of central New York. Its leasing division rents and manages properties for others, and its maintenance division performs services such as carpentry, painting, plumbing, and electrical work. The maintenance
19.18 "In setting transfer prices for multinationals, tax consid- erations can be the tail that wags the dog." Explain.
19.17 "Basing transfer prices on full absorption costs can really screw up decision making in a company!" Explain this remark by a manufacturing vice president, and construct a simple numerical example to make the point.
19.16 "Setting transfer prices by negotiation is detrimental to the company." Do you agree or disagree with this statement by the CEO of a midsize manufacturing company? Why?
19.15 When setting a transfer price for goods sold across inter- national boundaries, what factors should management consider?
19.14 Refer to Cost Management in Practice 19.1 on page 802. Why did the Internal Revenue Service dispute the US subsidiary's reported profits and losses?
19.13 Division A has no external markets. It produces monofil- ament used by division B, which cannot purchase this particular type of monofilament from any other source. What transfer-pricing system would you recommend for the interdivisional sales of monofilament? Why?
19.12 What are some goals of a transfer pricing system in a decentralized organization?
19.11 How does the choice of a transfer price affect the operat- ing profits of both segments involved in an intracompany transfer?
19.10 Explain the effect of import duties, or tariffs, on the transfer-pricing policies of multinational companies.
19.9 What is the general transfer-pricing rule?
19.8 Some have suggested that managers should negotiate transfer prices. What are the disadvantages of a negoti- ated transfer-pricing system?
19.7 What is the basis for choosing between actual and stan- dard costs for cost-based transfer pricing?
19.6 Why do companies often use prices other than market prices for interdivisional transfers?
19.5 What are the advantages and disadvantages of top manage- ment's direct intervention in a transfer-pricing dispute?
19.4 What are the limitations to market-based transfer prices?
19.3 Why are market-based transfer prices considered optimal under many circumstances?
19.2 Describe four methods by which transfer prices can be set.
19.1 Why do transfer prices exist even in highly centralized organizations?
18.48 River Beverages is a food and soft-drink company with worldwide operations. The company is organ- ized into five regional divisions with each vice president reporting directly to the CEO, Cindy Wilkins. Each vice president has an R&D department, controller, and three divisions; carbonated
18.47 Drawem Company purchased Bildem Company three years ago. Prior to the acquisition, Bildem manu- factured and sold electronic products to third-party customers. Since becoming a division of Drawem. Bildem now manufactures electronic components only for products made by Drawem's Macon Division.
18.46 Louisiana Shrimp Boats, Inc. (LSB), is a seafood restaurant chain operating throughout the south. The company has two sources of long-term capital: debt and equity. LSB's cost of issuing debt is the after- tax cost of the interest payments on the debt, considering the fact that the interest
18.45 Toronto Machine Tool Company (TMTC) is a highly diversified and decentralized company. Each divi- sion is responsible for its own sales, pricing, production, and costs of operations; management of accounts receivable, inventories, and accounts payable; and use of existing facilities.
18.44 Gigantic Corporation's division managers have been expressing growing dissatisfaction with the meth- ods Gigantic uses to measure division performance. Division operations are evaluated every quarter by comparison with the master budget prepared during the prior year. Division managers claim
18.42 Refer to Exhibit 18-6. Prepare a similar table of the changing ROI assuming the following accelerated depreciation schedule. Assume income before depreciation of $150,000 per year. (If there is a loss, leave the ROI column blank.)Requireda. How does your table differ from the one in Exhibit
18.41 Refer to the information given in the preceding problem. As the Micro Technology Division manager. you are still assessing the problem of whether to acquire Klondike Machine Company's machine. You learn that the new machine could be acquired next year, but it will cost 15 percent more then.
18.40 Compu Tech, Inc., a manufacturer of products using the latest microprocessor technology, has appointed you the manager of its Micro Technology Division. Your division has $800,000 in assets and manufac- tures a special chip assembly. On January 2 of the current year, you invested $1 million
18.39 Michigan Pipe Fitting Corporation has two divisions to which the following data pertain. The com- pany's required rate of return on invested capital is 8 percent. Sales revenue. Income Average investment Sales margin. _ $10,000,000 Detroit Division Flint Division ? $ 2,000,000 $400,000 $
Showing 400 - 500
of 3353
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Last
Step by Step Answers
Get 50% OFF
Claim Now
