Grey Corporation makes a special-purpose 04H machine used in the

Grey Corporation makes a special-purpose 04H machine used in the textile industry. Grey has designed the 04H machine for 2018 to be distinct from its competitors. It has been generally regarded as a superior machine. Grey presents the following data for the years 2018 and 2019.

2018 2019 1. Units of D4H produced and sold 210 200 $40,000 $42,000 2. Selling price 3. Direct materials (kilograms) 300


Grey produces no defective machines, but it wants to reduce direct materials usage per 04H machine in 2019. Manufacturing conversion costs in  each year depend on production capacity defined in terms of D4H units that can be produced, not the actual units of 04H produced. Selling and customer service costs depend on the number of customers that Grey can support, not the actual number of customers Grey serves. Grey has 75 customers in 2018 and 80 customers in 2019. At the start of each year, management uses its discretion to determine the number of design staff for the year. The design staff and costs have no direct relationship with the quantity of D4H produced or the number of customers to whom D4H is sold.


Required

1. Is Grey's strategy one of product differentiation or cost leadership? Explain briefly.

2. Describe briefly key elements that you would include in Grey's BSC and the reasons for doing so.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...

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