Geeksquad Corporation (GC) makes a high-end Computer Monitor, CM12 and follows a strategy of product differentiation....
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Geeksquad Corporation (GC) makes a high-end Computer Monitor, CM12 and follows a strategy of product differentiation. Revenue and cost data for SC for 2017 and 2018 was as follows: Units of CM12 produced and sold 2017 5,000 2018 5,250 Selling price per unit $ 400.00 $ 450.00 Direct materials (kilograms) 15,000 15,375 Direct material costs per kilogram $ 40.00 $ 47.00 Manufacturing capacity for CM12 (units) 10,000 10,000 Total manufacturing conversion costs $ 500,000 $ 520,000 Manufacturing conversion costs per unit of capacity $ 50.00 $ 52.00 Selling and customer-service capacity (customers) 60 55 Total selling and customer service costs 180,000 $ Cost per customer of selling & customer service capacity $ 3,000.00 $ 171,875 3,125.00 2018 vs 2017 Performance Report Units sold Revenue Direct Materials Manufacturing Conversion Costs Selling and Customer service costs Operating Income 2018 2017 Volume Variance Price Variance Efficiency Variance Total Variance 5,250 5,000 $ 2,362,500 $ 2,000,000 $ 722,625 600,000 100,000 $ 262,500 $ (30,000) (110,250) 17,625 520,000 500,000 171,875 180,000 948,000 720,000 (20,000) (7,500) 15,625 $ 362,500 (122,625) (20,000) 8,125 70,000 124,750 33,250 228,000 GC went through a strategic planning exercise near the end of 2017 and during that exercise identified that its quality was very good but it wanted to reduce direct materials usage per unit of CM12 in future years. Manufacturing conversion costs in each year depend on production capacity defined in terms of CM12 units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Neither conversion costs nor customer-service costs are affected by changes in actual volume of units produced. GC had 46 customers in 2017 and 50 customers in 2018. Required: Assume you were the consultant that helped GC with its strategic planning exercise near the end of 2017. Create a relevant balanced scorecard for GC that considers its key objective of reducing direct material usage per unit and is consistent with its overall strategy of product differentiation. Geeksquad Corporation (GC) makes a high-end Computer Monitor, CM12 and follows a strategy of product differentiation. Revenue and cost data for SC for 2017 and 2018 was as follows: Units of CM12 produced and sold 2017 5,000 2018 5,250 Selling price per unit $ 400.00 $ 450.00 Direct materials (kilograms) 15,000 15,375 Direct material costs per kilogram $ 40.00 $ 47.00 Manufacturing capacity for CM12 (units) 10,000 10,000 Total manufacturing conversion costs $ 500,000 $ 520,000 Manufacturing conversion costs per unit of capacity $ 50.00 $ 52.00 Selling and customer-service capacity (customers) 60 55 Total selling and customer service costs 180,000 $ Cost per customer of selling & customer service capacity $ 3,000.00 $ 171,875 3,125.00 2018 vs 2017 Performance Report Units sold Revenue Direct Materials Manufacturing Conversion Costs Selling and Customer service costs Operating Income 2018 2017 Volume Variance Price Variance Efficiency Variance Total Variance 5,250 5,000 $ 2,362,500 $ 2,000,000 $ 722,625 600,000 100,000 $ 262,500 $ (30,000) (110,250) 17,625 520,000 500,000 171,875 180,000 948,000 720,000 (20,000) (7,500) 15,625 $ 362,500 (122,625) (20,000) 8,125 70,000 124,750 33,250 228,000 GC went through a strategic planning exercise near the end of 2017 and during that exercise identified that its quality was very good but it wanted to reduce direct materials usage per unit of CM12 in future years. Manufacturing conversion costs in each year depend on production capacity defined in terms of CM12 units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Neither conversion costs nor customer-service costs are affected by changes in actual volume of units produced. GC had 46 customers in 2017 and 50 customers in 2018. Required: Assume you were the consultant that helped GC with its strategic planning exercise near the end of 2017. Create a relevant balanced scorecard for GC that considers its key objective of reducing direct material usage per unit and is consistent with its overall strategy of product differentiation.
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Geeksquad Corporation Balanced Scorecard Perspective Objective Measure Target Initiatives Financial Increase profitability Operating margin 20 Implement costsaving measures increase product prices Cus... View the full answer
Related Book For
Management And Cost Accounting
ISBN: 9781292232669
7th Edition
Authors: Alnoor Bhimani, Srikant M. Datar, Charles T. Horngren, Madhav V. Rajan
Posted Date:
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