Krater Associates is an architectural firm that has been in practice only a few years. Because it

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Krater Associates is an architectural firm that has been in practice only a few years. Because it is a relatively new firm, the market for the firm’s services is very competitive. To compete successfully, Krater must deliver quality services at a low cost. Krater presents the following data for 2019 and 2020.


Required

Architect labor-hour costs are variable costs. Architect support costs for each year depend on the architect support capacity that Krater chooses to maintain each year (that is, the number of jobs it can do each year). Architect support costs do not vary with the actual number of jobs done that year.

1. Is Krater Associate’s strategy one of product differentiation or cost leadership? Explain briefly.

2. Describe key measures you would include in Krater’s balanced scorecard and your reasons for doing so.

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Horngrens Cost Accounting A Managerial Emphasis

ISBN: 9780135628478

17th Edition

Authors: Srikant M. Datar, Madhav V. Rajan

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