Caillie Building Services has been in business for two years. As it is a relatively new firm
Question:
Caillie Building Services has been in business for two years. As it is a relatively new firm in a competitive market it is trying to deliver quality services at a low cost. Caillie presents the following data for 2020 and 2021.
2020 | 2021 | |
| 40 | 50 |
| $32,000 | $30,000 |
| 24,000 | 27,000 |
| $35 | $36 |
| 60 | 60 |
| $168,000 | $180,000 |
| $2,800 | $3,000 |
Builder labour hour costs are variable costs. Labourer support costs are dependent on the Labourer capacity Caillie chooses each year (that is the number of jobs the firm can do each year). Labourer support costs do not change with the actual number of jobs each year.
- Is Caillie’s strategy one of product differentiation or cost leadership? Explain briefly.
- Calculate the growth, price recovery and productivity components that explain the changes in operating income from 2020 to 2021. (5 marks)
- What do these components indicate in relation to the company’s strategy?
- Describe two key measures for Caillie to include in two of the four categories of the Balanced Scorecard (total of four measures). The measures should be specific to Caillie’s strategic objectives and not general measures.
Horngrens Accounting
ISBN: 978-0133855371
10th Canadian edition Volume 1
Authors: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura, Carol A. Meissner, Jo-Ann L. Johnston, Peter R. Norwood