Meredith Ltd makes a special-purpose machine D4H used in the textile industry. Meredith has designed the D4H

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Meredith Ltd makes a special-purpose machine D4H used in the textile industry. Meredith has designed the D4H machine for 2015 to be distinct from its competitors. It has been generally regarded as a superior machine. Meredith presents the following data for the years 2014 and 2015.
Meredith Ltd makes a special-purpose machine D4H used in the

Meredith produces no defective machines, but it wants to reduce direct materials usage per D4H machine in 2015. Conversion costs in each year depend on production capacity defined in terms of D4H units that can be produced, not the actual units of D4H produced. Selling and customer-service costs depend on the number of customers that Meredith can support, not the actual number of customers Meredith serves. Meredith has 75 customers in 2014 and 80 customers in 2015. At the start of each year, management uses its discretion to determine the number of design staff for the year. The design staff and costs have no direct relationship with the quantity of D4H produced or the number of customers to whom D4H is sold.
Required
1. Is Meredith's strategy one of product differentiation or cost leadership? Explain briefly.
2. Describe briefly key elements that you would include in Meredith's balanced scorecard and the reasons for doing so.

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Management and Cost Accounting

ISBN: 978-1292063461

6th edition

Authors: Alnoor Bhimani, Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan

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