2017 2016 1. Number of jobs billed 2. Selling price per job 40 50 $32,000 $30,000 3. Architect labor-hours 24,000 27,000 4. Cost per architect labor-hour 5. Architect support capacity (number of jobs the firm can do) 6. Total cost of software-implementation support $35 $36 60 60 $180,000 $168,000 7. Software-implementation support-capacity cost per job (row 6 ÷ row 5) $2,800 $3,000 Architect labor-hour costs are variable costs. Architect support costs for each year depend on the Architect support capacity that Compton 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 Compton Associate's strategy one of product differentiation or cost leadership? Explain briefly. 2. Describe key measures you would include in Compton's balanced scorecard and your reasons for doing so. Required

Question

Strategy, balanced scorecard, service company. Compton 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, Compton must deliver quality services at a low cost. Compton presents the following data for 2016 and 2017.

2017
2016
1. Number of jobs billed
2. Selling price per job
40
50
$32,000
$30,000
3. Architect labor-hours
24,000
27,000
4. Cost per architect labor-hour
5. Architect support capacity (number of jobs the firm can do)
6. Total cost of software-implementation support
$35
$36
60
60
$180,000
$168,000
7. Software-implementation support-capacity cost per job (row 6 ÷ row 5)
$2,800
$3,000
Architect labor-hour costs are variable costs. Architect support costs for each year depend on the Architect
support capacity that Compton 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 Compton Associate's strategy one of product differentiation or cost leadership? Explain briefly.
2. Describe key measures you would include in Compton's balanced scorecard and your reasons for
doing so.
Required
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Transcribed Image Text

2017 2016 1. Number of jobs billed 2. Selling price per job 40 50 $32,000 $30,000 3. Architect labor-hours 24,000 27,000 4. Cost per architect labor-hour 5. Architect support capacity (number of jobs the firm can do) 6. Total cost of software-implementation support $35 $36 60 60 $180,000 $168,000 7. Software-implementation support-capacity cost per job (row 6 ÷ row 5) $2,800 $3,000 Architect labor-hour costs are variable costs. Architect support costs for each year depend on the Architect support capacity that Compton 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 Compton Associate's strategy one of product differentiation or cost leadership? Explain briefly. 2. Describe key measures you would include in Compton's balanced scorecard and your reasons for doing so. Required

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