Northland Corporation is a small information-systems consulting firm that specializes in helping companies implement standard sales-management software. The market for Northalndss services is very competitive. To compete successfully, Northland must deliver quality service at a low cost. Northland presents the following data for 2011 and 2012.

	2011	2012
Number of jobs billed	40	55
Selling price per job	$45,000	$42,000
Software-implementation labor-hours	25,000	28,000
Cost per software-implementation labor hour	$58	$60
Software-implementation support capacity (number of jobs it can do)	70	70
Total cost of software-implementation support	$224,000	$252,000
Software-implementation support-capacity cost per job	$3,200	$3,600

Software-implementation labor-hour costs are variable costs. Software-implementation support costs for each year depend on the software-implementation support capacity Northland Chooses to maintain each year (that is, the number of jobs it can do each year). Software-implementation support costs do not vary with the actual number of jobs done that year.

a) Is Northland Corporations strategy one of product differentiation or cost leadership? Explain Briefly?

b) Describe key measures you would include in Northlands balanced scorecard and your reasons for doing so.

c) Calculate the operating income of Northland Corporation in 2011 and 2012

d) Calculate the growth, price-recovery, and productivity components that explain the change in operating income from 2011 to 2012.

e) Comment on your answer in requirement d. What do these components indicate?

f) Calculate the amount and cost of unused software-implementation support capacity at the beginning of 2012, based on the number of jobs actually done in 2012.

g) Suppose Northland can add or reduce its software-implementation support capacity in increments of 10 units. What is the maximum amount of costs that Northland could save in 2012 by downsizing software implementation support capacity?

h) Northland, in fact, does not eliminate any of its unused software-implementation support capacity. Why might Northland not downsize?