Question
The CMYK (cyan, magenta, yellow, and black) Company manufactures various types of color laser printers in a highly automated facility with high fixed costs. The
The CMYK (cyan, magenta, yellow, and black) Company manufactures various types of color laser printers in a highly automated facility with high fixed costs. The market for laser printers is competitive and the various color laser printers on the market are comparable in terms of features and price. CMYK's strategy to achieve target profitability is to produce and sell high quality laser printers at a low cost.
For 2019, CMYK planned to increase quality and lower costs by improving yields and reducing defects in its manufacturing operations, and to train workers and encourage them to seek real-time feedback. Currently, a significant amount of CMYK's capacity is used to produce products that are defective and cannot be sold. CMYK expects that higher yields and reduced defects will lower some costs. The higher yields will also allow CMYK to reduce the fixed costs of capacity that the company needs to manufacture products, e.g., by reducing the number of employees and the amount of required plant and equipment. Alternatively, CMYK could maintain its current level of capacity but produce and sell more of its current products or improved models of its current products.
CMYK's balanced scorecard for the just-completed fiscal year 2019 as follows:
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