12-27 Analysis of growth, price-recovery, and productivity components (continuation of 12-25 and 12-26). Suppose that during 2017, the market for Stanmore's special-purpose machines grew by 3%. All increases in market share (that is, sales increases greater than 3%) are the result of Stanmore's strategic actions. not on the 017. Calculate how much of the change in operating income from 2016 to 2017 is due to the industry-market-size factor, product differentiation, and cost leadership. How successful has Stanmore been in implementing its strategy? Explain continuation of 12-25). Refer to Exercise 12-25. 12-25 Strategy. balanced Scorecard. Stanmore Corporation makes a special-purpose machine, Dah, used in the textile industry. Stanmore has designed the D4H machine for 2017 to be distinct from its com petitors. It has been generally regarded as a superior machine. Stanmore presents the following data for 2016 and 2017 1. Units of D4H produced and sold 2. Selling price 3. Direct materials (kilograms) 4. Direct material cost per kilogram 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 10. Selling and customer-service capacity cost per customer (row 9 + row 8) 2016 200 $40,000 300,000 $8 250 $2,000,000 $8,000 100 customers $1,000,000 $10,000 2017 210 $42,000 310,000 $8.50 250 $2,025,000 $8,100 95 customers $940,500 $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 red- sons for doing so. 12-26 Strategic analysis of operating income (continuation of 12-25). Refer to Exercise 12-25. 1. Calculate the operating income of Stanmore Corporation in 2016 and 2017. 2. Calculate the growth, price-recovery, and productivity components that explain the change in operat- ing income from 2016 to 2017 3. Comment on your answer in requirement 2. What do these components indicate? 12-27 Analysis of growth, price-recovery, and productivity components (continuation of 12-25 and 12:26) Suppose that during 2017, the market for Stanmore's special-purpose machines grew by 3%. All increases in market share (that is, sales increases greater than 3%) are the result of Stanmore's strategic actions 12-27 Analysis of growth, price-recovery, and productivity components (continuation of 12-25 and 12-26). Suppose that during 2017, the market for Stanmore's special-purpose machines grew by 3%. All increases in market share (that is, sales increases greater than 3%) are the result of Stanmore's strategic actions. not on the 017. Calculate how much of the change in operating income from 2016 to 2017 is due to the industry-market-size factor, product differentiation, and cost leadership. How successful has Stanmore been in implementing its strategy? Explain continuation of 12-25). Refer to Exercise 12-25. 12-25 Strategy. balanced Scorecard. Stanmore Corporation makes a special-purpose machine, Dah, used in the textile industry. Stanmore has designed the D4H machine for 2017 to be distinct from its com petitors. It has been generally regarded as a superior machine. Stanmore presents the following data for 2016 and 2017 1. Units of D4H produced and sold 2. Selling price 3. Direct materials (kilograms) 4. Direct material cost per kilogram 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 10. Selling and customer-service capacity cost per customer (row 9 + row 8) 2016 200 $40,000 300,000 $8 250 $2,000,000 $8,000 100 customers $1,000,000 $10,000 2017 210 $42,000 310,000 $8.50 250 $2,025,000 $8,100 95 customers $940,500 $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 red- sons for doing so. 12-26 Strategic analysis of operating income (continuation of 12-25). Refer to Exercise 12-25. 1. Calculate the operating income of Stanmore Corporation in 2016 and 2017. 2. Calculate the growth, price-recovery, and productivity components that explain the change in operat- ing income from 2016 to 2017 3. Comment on your answer in requirement 2. What do these components indicate? 12-27 Analysis of growth, price-recovery, and productivity components (continuation of 12-25 and 12:26) Suppose that during 2017, the market for Stanmore's special-purpose machines grew by 3%. All increases in market share (that is, sales increases greater than 3%) are the result of Stanmore's strategic actions