CHAPTER 13 QUIZ
1. Which of the following are two generic strategies described in the text that a company
can use?
a. Growth and product differentiation
b. Price recovery and growth
c. Product differentiation and cost leadership
d. Cost leadership and price recovery
2. Reengineering is a key element in
a. cost leadership strategy.
b. price-recovery strategy.
c. product-differentiation strategy.
d. productivity measures.
3. Which of the following is the most critical aspect of a successful reengineering process?
a. Eliminating unnecessary activities and tasks
b. Developing employee skills
c. Changing roles and responsibilities
d. Working across functional lines to focus on the entire business process
4. The balanced scorecard gets its name from
a. an attempt to provide short-run financial results with long-run financial strategies.
b. an attempt to balance product quality and cost reduction.
c. an attempt to match a company’s own capabilities with the opportunities in the
marketplace to accomplish an overall objective.
d. an attempt to balance financial and nonfinancial performance measures to evaluate both
short-run and long-run performance in a single report.
5. Creating value for customers describes which one of the four perspectives of the
balanced scorecard?
a. Financial perspective
b. Customer perspective
c. Internal business process perspective
d. Learning and growth perspective
6. The analysis used for evaluating the success of a strategy through changes in operating
income components uses actual results of the current year compared to
a. budgeted results for the current year.
b. actual results for the previous year.
c. target amounts for the current year.
d. budgeted results for the previous year.
7. The growth in market share is used in calculating the net income effect
a. of industry growth.
b. of product differentiation.
c. of cost leadership.
d. of either cost leadership or product differentiation, depending upon the strategy chosen.
8. The following strategic analysis of profitability was prepared for the Corum Company:
Revenue and Revenue and
Income Cost Effects Cost Effects of Cost Effect of Income
Statement of Growth Price-Recovery Productivity Statement
Amounts Component Component Component Amounts
in 2008 in 2009 in 2009 in 2009 in 2009
(1) (2) (3) (4) (5)
Revenues $300,000 $40,000 F $85,000 F $425,000
Costs 240,000 24,000 U 34,000 U $8,000 U 306,000
Operating income $ 60,000 $ 16,000 F $51,000 F $ 8,000 U $ 119,000
$59,000 F
Change in operating income
The market growth rate in the industry was 9 percent in 2009. Sales in 2009 were 17,000
units at $25 each. Corum sold 15,000 units at a unit-selling price of $20 in 2008.
The effect of the industry market size factor for Corum Company in 2009 was
a. $5,200.
b. $10,800.
c. $12,240.
d. $13,500.
9. A discretionary cost can best be described by which of the following statements?
a. The level of uncertainty of deviations of actual amounts from expected results is greater
for discretionary costs than for engineered costs.
b. Discretionary costs result from cause-and-effect relationships between outputs and
inputs.
c. Discretionary costs are added to or subtracted from in a step fashion.
d. Discretionary costs are variable costs incurred in relation to capacity issues.
10. Many companies have tried to downsize in an attempt to eliminate
a. inefficiencies and waste associated with non-value-added costs.
b. their unused capacity.
c. costs associated with both direct and indirect labor.
d. costs through using information technology.
11. [Appendix] Which of the following statements is true about productivity measures?
a. A major disadvantage of total factor productivity is that it measures the combined
productivity of all inputs to produce output.
b. Partial productivity and total factor productivity measures work best together because
the strengths of one are the weaknesses of the other.
c. Total factor productivity is calculated by dividing the costs of all inputs used by the
quantity of output produced.
d. The higher the inputs for a given quantity of outputs or the lower the outputs for a given
quantity of inputs, the higher the level of productivity.
CHAPTER 13 QUIZ SOLUTIONS
