COST ACCOUNTING TTU >IC<
17th Edition
ISBN: 9781323409046
Author: Horngren
Publisher: PEARSON
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Textbook Question
Chapter 12, Problem 12.22E
Strategic analysis of operating income (continuation of 12-21). Refer to Exercise 12-21.
- 1. Calculate Gianni’s operating income in both 2016 and 2017.
Required
- 2. Calculate the growth, price-recovery, and productivity components that explain the change in operating income from 2016 to 2017.
- 3. Comment on your answers in requirement 2. What does each of these components indicate?
12-21 Strategy, balanced scorecard, merchandising operation. Gianni & Sons buys T-shirts in bulk, applies its own trendsetting silk-screen designs, and then sells the T-shirts to a number of retailers. Gianni wants to be known for its trendsetting designs, and it wants every teenager to be seen in a distinctive Gianni T-shirt. Gianni presents the following data for its first two years of operations, 2016 and 2017.
2016 | 2017 | |
1. Number of T-shirts purchased | 215,000 | 245,000 |
2. Number of T-shirts discarded | 15,000 | 20,000 |
3. Number of T-shirts sold (row 1 – row 2) | 200,000 | 225,000 |
4. Average selling price | $ 30.00 | $ 31.00 |
5. Average cost per T-shirt | $ 15.00 | $ 13.00 |
6. Administrative capacity (number of customers) | 4,500 | 4,250 |
7. Administrative costs | $1,633,500 | $1,593,750 |
8. Administrative cost per customer (row 7 ÷ row 6) | $ 363 | $ 375 |
Administrative costs depend on the number of customers Gianni has created capacity to support, not on the actual number of customers served. Gianni had 3,600 customers in 2016 and 3,500 customers in 2017.
- 1. Is Gianni’s strategy one of product differentiation or cost leadership? Explain briefly.
Required
- 2. Describe briefly the key measures Gianni should include in its balanced scorecard and the reasons for doing so.
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Strategic analysis of operating income (continuation of 12-21). Refer to Exercise 12-21.
Calculate Gianni‘s operating income in both 2016 and 2017.
Calculate the growth, price-recovery, and productivity components that explain the change in operating income from 2016 to 2017.
Comment on your answers in requirement 2. What does each of these components indicate? Reference:
Strategy, balanced scorecard, merchandising operation. Gianni & Sons buys T-shirts in bulk, applies its own trendsetting silk-screen designs, and then sells the T-shirts to a number of retailers. Gianni wants to be known for its trendsetting designs, and it wants every teenager to be seen in a distinctive Gianni T-shirt. Gianni presents the following data for its first two years of operations, 2016 and 2017.
Use the following information for Short Exercises S15-6 through S15-10.
Accel’s Companies, a home improvement store chain, reported the following summarized figures:
Requirements
Compute the profit margin ratio for Accel’s Companies for 2018.
Compute the rate of return on total assets for 2018.
Below is a list of various metrics used to measure performance. For each metric, identify the correct balanced scorecard perspective with which the metric is associated.
Metric
Balanced Scorecard Perspective
Average stock price
Economic value added
Employee turnover rates
Manufacturing cycle time
Market share
Number of days from product launch to shelf
Number of defects
Number of new patent applications
Percentage of repeat customers
Percentage decrease in operating costs
Percentage of sales generated by new products
Research and development spending as a percentage of net revenues
options:
Customer
Financial
Internal Business
Learning and Growth
Chapter 12 Solutions
COST ACCOUNTING TTU >IC<
Ch. 12 - Define strategy.Ch. 12 - Describe the five key forces to consider when...Ch. 12 - Prob. 12.3QCh. 12 - What is a customer preference map, and why is it...Ch. 12 - Prob. 12.5QCh. 12 - What are four key perspectives in the balanced...Ch. 12 - What are the five types of conditions to consider...Ch. 12 - Describe three features of a good balanced...Ch. 12 - What are three important pitfalls to avoid when...Ch. 12 - Describe three key components in doing a strategic...
Ch. 12 - Why might an analyst incorporate the...Ch. 12 - How does an engineered cost differ from a...Ch. 12 - What is downsizing?Ch. 12 - What is a partial-productivity measure?Ch. 12 - Prob. 12.15QCh. 12 - Jacobs Inc. is a relatively new company that has...Ch. 12 - The balanced scorecard describes all of the...Ch. 12 - Canarsie Corporation uses a balanced scorecard to...Ch. 12 - Balanced scorecard. Pineway Electric manufactures...Ch. 12 - Analysis of growth, price-recovery, and...Ch. 12 - Strategy, balanced scorecard, merchandising...Ch. 12 - Strategic analysis of operating income...Ch. 12 - Analysis of growth, price-recovery, and...Ch. 12 - Identifying and managing unused capacity...Ch. 12 - Strategy, balanced scorecard. Stanmore Corporation...Ch. 12 - Strategic analysis of operating income...Ch. 12 - Analysis of growth, price-recovery, and...Ch. 12 - Identifying and managing unused capacity...Ch. 12 - Strategy, balanced scorecard, service company....Ch. 12 - Strategic analysis of operating income...Ch. 12 - Analysis of growth, price-recovery, and...Ch. 12 - Identifying and managing unused capacity...Ch. 12 - Balanced scorecard and strategy. Scott Company...Ch. 12 - Strategic analysis of operating income...Ch. 12 - Analysis of growth, price-recovery, and...Ch. 12 - Identifying and managing unused capacity...Ch. 12 - Balanced scorecard. Following is a random-order...Ch. 12 - Balanced scorecard. (R. Kaplan, adapted) Petrocal,...Ch. 12 - Balanced scorecard. Vic Corporation manufactures...Ch. 12 - Balanced scorecard, environmental, and social...Ch. 12 - Balanced scorecard, social performance. Comtex...Ch. 12 - Balanced scorecard, environmental, and social...Ch. 12 - Partial-productivity measurement. Gable Company...Ch. 12 - Total factor productivity (continuation of 12-43)....
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