Question 1:
Consider the CFO of your organization approaches you to ask your advice about implementing the Balanced Scorecard at your organization. What steps could you encourage him or her to take in order to productively implement and use the Scorecard to manage the organization? As part of your answer, be sure to explain any roadblocks to be avoided. Be specific.
Question 2:
The subsequent is budgeted information for the Sophia Corporation:
Product 1 Product 2
Annual production & sales 10,000 30,000
Projected selling price $12 $19
Direct Production Cost Information
Materials (per unit) $2 $4
Direct Labor (per unit) $3 $6
Additional information:
- Manufacturing overhead costs (a mixed cost) are budgeted to be $240,000 at the sales and production listed above. The fixed component is $160,000. Each product uses the same amount of variable manufacturing overhead per unit.
- Administrative and Selling costs (a mixed cost) are budgeted to be $100,000 at the sales and production listed above. The variable component is $1 per unit (same for each product).
Consider the budgeted sales mix remains intact, how many units of each product does Sophia need to sell in order to break even?
Question 3:
Consider the subsequent information, prepared based on monthly production and sales of 40,000 units:
Category Cost per Unit
Direct materials $2.50
Direct manufacturing labor $2.50
Variable manufacturing overhead $3.00
Fixed manufacturing overhead $2.00
Variable marketing $1.50
Fixed marketing $1.00
There is no way for the company to add capacity in the short-run. In addition, the firm presently sells the product for $15 per unit.
a) The company is presently producing 35,000 units per month. A potential customer has contacted the firm and presented to purchase 5,000 units this month only at a price of $12 per unit. There could be no variable marketing costs incurred on the contract. Would the company accept the special order? Why or why not? Be specific.
b) Consider the same facts as in part a, except that the company is producing 40,000 units per month. Could the company accept the special order? Why or why not? Be specific.
Question 4:
Consider a company produces and sells the subsequent 3 products. If the company is limited to 1,000 machine hours (MH), how many units of each product could it produce in order to maximize operating income?
Product A B C
Selling price per unit $100 $150 $110
Variable costs per unit $70 $90 $40
MH required per unit 2 6 5
Maximum sales (units) 200 100 150