2016 2017 1. Units of D4H produced and sold 2. Selling price 3. Direct materials (kilograms) 4. Direct material cost per kilogram 200 210 $40,000 $42,000 300,000 310,000 $8.50 5. Manufacturing capacity in units of D4H 6. Total conversion costs 7. Conversion cost per unit of capacity (row 6 ÷ row 5) 8. Selling and customer-service capacity 9. Total selling and customer-service costs 250 250 $2,000,000 $2,025,000 $8,000 $8,100 100 customers 95 customers $1,000,000 $940,500 10. Selling and customer-service capacity cost per customer (row 9 + row 8) $10,000 $9,900 Stanmore produces no defective machines, but it wants to reduce direct materials usage per D4H machine in 2017. Conversion costs in each year depend on production capacity defined in terms of D4H units that can be produced, not the actual units produced. Selling and customer-service costs depend on the num- ber of customers that Stanmore can support, not the actual number of customers it serves. Stanmore has 75 customers in 2016 and 80 customers in 2017. 1. Is Stanmore's strategy one of product differentiation or cost leadership? Explain briefly. 2. Describe briefly key measures that you would include in Stanmore's balanced scorecard and the rea- sons for doing so. Required

Question

Strategy, balanced scorecard. Stanmore Corporation makes a special-purpose machine, D4H, used in the textile industry. Stanmore has designed the D4H machine for 2017 to be distinct from its competitors. It has been generally regarded as a superior machine. Stanmore presents the following data for 2016 and 2017.

2016
2017
1. Units of D4H produced and sold
2. Selling price
3. Direct materials (kilograms)
4. Direct material cost per kilogram
200
210
$40,000
$42,000
300,000
310,000
$8.50
5. Manufacturing capacity in units of D4H
6. Total conversion costs
7. Conversion cost per unit of capacity (row 6 ÷ row 5)
8. Selling and customer-service capacity
9. Total selling and customer-service costs
250
250
$2,000,000
$2,025,000
$8,000
$8,100
100 customers
95 customers
$1,000,000
$940,500
10. Selling and customer-service capacity cost per customer
(row 9 + row 8)
$10,000
$9,900
Stanmore produces no defective machines, but it wants to reduce direct materials usage per D4H machine
in 2017. Conversion costs in each year depend on production capacity defined in terms of D4H units that
can be produced, not the actual units produced. Selling and customer-service costs depend on the num-
ber of customers that Stanmore can support, not the actual number of customers it serves. Stanmore has
75 customers in 2016 and 80 customers in 2017.
1. Is Stanmore's strategy one of product differentiation or cost leadership? Explain briefly.
2. Describe briefly key measures that you would include in Stanmore's balanced scorecard and the rea-
sons for doing so.
Required
View transcribed image text
Expand

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Accounting

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: he accountant for the firm owned by Randy Guttery prepares financial statements at the end of each m...

A: Prepare a trial balance for Randy Guttery, Landscape Consultant.

Q: Relevant costs, contribution margin, product emphasis. The Beach Comber is a take-out food store at ...

A: Click to see the answer

Q: Product mix, constrained resource. Wechsler Company produces three products: A130, B324, and C587. A...

A: 1.

Q: Additional disclosures are required pertaining to the income tax expense reported in the income stat...

A: The company must disclose all additional information regarding the income tax expenses reported in i...

Q: Name three approaches to measuring benefit obligationsfrom a pension plan and explain how they diffe...

A: Pension: A fixed sum of money receivable in future or after the age of retirement, which the employe...

Q: What type of earnings per share presentation is requiredin a complex capital structure?

A: Earnings per share:Amount available as earnings for each of the common shares outstanding for a repo...

Q: Relevance of equipment costs. Janet’s Bakery is thinking about replacing the convection oven with a ...

A: Relevant Cost: The various relevant costs are given below: Old Oven: Current disposal value, Annual ...

Q: Campus Cellular provides cell phones and 1 year of cell serviceto students for an upfront, nonrefund...

A: A non-refundable fee of $300 will enable the student to renew the service and normally, it is renewe...

Q: a. Based on the data in Exercise 20-11 (attached), determine the following:1. Cost of beginning work...

A: The statement of equivalent production units (EPUs) shows the equivalent units of production for mat...

Q: What are postretirement benefits other than pensions?

A: Pension fund: A fixed sum of money is receivable in future or after the age of retirement, which the...

Q: PARRISH 2-7 SOLVING FOR T-ACCOUNTS I know what T-Accounts are and how they work.  I simply need you ...

A: Calculate the ending balance of salary expense.

Q: Irwin, Inc., constructed a machine at a total cost of $35 million. Construction was completed at the...

A: Click to see the answer

Q: The par value of common stock represents a. the estimated fair value of the stock when it was issued...

A: The correct answer is Option (a).

Q: The Trump Companies, Inc., has ownership interests in several public companies. At the beginning of ...

A: Calculate the amount of equity investment.

Q: Domino Foods, Inc., manufactures a sugar product by a continuous process involving three production ...

A:  (a)1Prepare the journal entry to record flow of costs into refining department during the period fo...

Q: In late 2015, the Nicklaus Corporation was formed. The corporate charter authorizes the issuance of ...

A: 1. Prepare journal entries to record the given transactions.Record the issuance of common shares.

Q: In 2016, the Barton and Barton Company changed its method of valuing inventory from the FIFO method ...

A: Prepare journal entry

Q: The increases to Work in Process—Roasting Department for Highlands Coffee Company for May as well as...

A: Production cost report:A production cost report is a comprehensive report prepared for each departme...

Q: Global Air Inc. recently hired a new accountant with limitedreal-world experience in corporate accou...

A: Stock: A kind of investment that are made by the investors, in order to get more returns is referred...

Q: Sugarbaker Designs, Inc., changed from the FIFO inventory costing method to the average cost method ...

A: Click to see the answer

Q: In 2014, Fogg, Inc., issued $10 par value common stock for $25 per share. No other common stock tran...

A: The correct answer is Option (b).

Q: The following information concerns production in the Finishing Department for May. The Finishing Dep...

A: a. 

Q: In 2016, the Marion Company purchased land containing a mineral mine for $1,600,000. Additional cost...

A: 1. 

Q: Help with part A and B

A: 1. Prepare an answer sheet:

Q: Hearty Soup Co. uses a process cost system to record the costs of processing soup, which requires th...

A: Requirement 1: Prepare the work in process inventory filling department ledger from April to May of ...

Q: A=$32982 p=27,200 r=5.93% t=?

A: The time value of money (TVM): Money available at present time has more value than the money in the ...

Q: Should gains and losses on a fair value hedge be recorded as they occur, or should they be recorded ...

A:  

Q: When DeSoto Water Works purchased a machine at the end of 2015 at a cost of $65,000, the company deb...

A: Click to see the answer

Q: Federal Semiconductors issued 11% bonds, dated January 1, with a face amount of $800 million on Janu...

A: 1. Prepare journal entry to record interest on June 30, 2016.

Q: At January 1, 2016, Transit Developments owed First City Bank Group $600,000, under an 11% note with...

A: Prepare the journal entries to record the restructuring of the debt by Transit Developments

Q: West Corp. leased a building and received the $36,000 annual rental payment on June 15, 2016. The be...

A: Deferred TaxDeferred tax is an amount i.e. computed on the basis of tax liability on the income as p...

Q: Madison Electric Company uses a fossil fuel (coal) plant for generating electricity. The facility ca...

A: (a)Calculate the cost per megawatt hour for the fossil fuel plant and for wind farm of the Company M...

Q: On 01-01-15, G purchased a machine for $10,000,000. Installation costs incurred and paid for on 01-0...

A: Click to see the answer

Q: Units of production data for the two departments of Atlantic Cable and Wire Company for July of the ...

A: Equivalent units of production refer to the work done on the units at the end of an accounting perio...

Q: What is intraperiod tax allocation?

A: Click to see the answer

Q: Webster Products, Inc., adopted the dollar-value LIFO method of determining inventory costs for fina...

A: Inventory costing method:The costing method that is used to record the cost of goods sold, and endin...

Q: Describe the critical factor in evaluating whether a performanceobligation is satisfied.

A: Performance Obligation: Performance obligation means a promise to transfer goods or services.

Q: Relevant costs. Ace Cleaning Service is considering expanding into one or more new market areas. Whi...

A: Sunk Cost: Sunk cost is defined as a cost which has been incurred and which cannot be recovered. It ...

Q: The shareholders’ equity section of the balance sheet of TNL Systems Inc. included the following acc...

A: a.

Q: Purchasing department cost drivers, activity-based costing, simple regression analysis. Perfect Fit ...

A: Requirement 1: Compare and evaluate the three simple regression models estimated by Hart. Graph. Cal...

Q: Hanmi Financial Corporation is the parent company of Hanmi Bank. The company’s stock split was annou...

A: Stock Splits: It is a method of increasing the total number of outstanding shares thereby, reducing ...

Q: Lighthouse Paper Company manufactures newsprint. The product is manufactured in two departments, Pap...

A: A (1)Prepare journal entries: 

Q: Johansen Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufac...

A: Total estimated overheads.

Q: What is a reverse stock split? What would be the effect of a reverse stock split on one million $1 p...

A:  

Q: At January 1, 2016, Brant Cargo acquired equipment by issuing a five-year, $150,000 (payable at matu...

A: 1.

Q: During 2016, the Nicklaus Corporation participated in three treasury stock transactions: a. On June ...

A: When a compnay buys back its own shares, they are called treasury stock.

Q: A net operating loss occurs when tax-deductible expenses exceed taxable revenues. Tax laws permit th...

A: Net Operating Loss Carry forward:The net operating loss is considered as negative taxable income. Wh...

Q: Lynch Corporation changes from the sum-of-the-years’-digits method of depreciation for existing asse...

A: Changes in depreciation: A change in depreciation methods are considered as a change in estimate tha...

Q: One of the longest debates in accounting history is the issue of deferred taxes. The controversy beg...

A: Temporary DifferenceTemporary difference refers to the difference of one income recognized by the ta...

Q: I need help

A: Working note:Calculate the cost of food used.

Transcribed Image Text

2016 2017 1. Units of D4H produced and sold 2. Selling price 3. Direct materials (kilograms) 4. Direct material cost per kilogram 200 210 $40,000 $42,000 300,000 310,000 $8.50 5. Manufacturing capacity in units of D4H 6. Total conversion costs 7. Conversion cost per unit of capacity (row 6 ÷ row 5) 8. Selling and customer-service capacity 9. Total selling and customer-service costs 250 250 $2,000,000 $2,025,000 $8,000 $8,100 100 customers 95 customers $1,000,000 $940,500 10. Selling and customer-service capacity cost per customer (row 9 + row 8) $10,000 $9,900 Stanmore produces no defective machines, but it wants to reduce direct materials usage per D4H machine in 2017. Conversion costs in each year depend on production capacity defined in terms of D4H units that can be produced, not the actual units produced. Selling and customer-service costs depend on the num- ber of customers that Stanmore can support, not the actual number of customers it serves. Stanmore has 75 customers in 2016 and 80 customers in 2017. 1. Is Stanmore's strategy one of product differentiation or cost leadership? Explain briefly. 2. Describe briefly key measures that you would include in Stanmore's balanced scorecard and the rea- sons for doing so. Required