Questions -

Q1. Comprehensive variance analysis. Kitchen Whiz manufactures premium food processors. The following is some manufacturing overhead data for Kitchen Whiz for the year ended December 31, 2010:

Actual Results Flexible Budget Allocated Amount

Variable costs $76,608 $76,800 $76,800

Fixed costs 305,208 348,096 376,320

Budgeted number of output units: 888

Planned allocation rate: 2 machine-hours per unit

Actual number of machine-hours used: 1,824

Static-budget variable manufacturing overhead costs: $71,040

Compute the following quantities in the prescribed order

-Budget number of machine hours planned

-Budgeted fixed manufacturing overhead costs per machine hour

-Budget variable manufacturing overhead costs per machine hour

-Budgeted number of machine-hours allowed for actual output produced.

-Actual number of output units.

-Actual number of machine-hours used per output unit.

Q2. Balanced scorecard and strategy. Dransfield Company manufactures an electronic component, ZP98. This component is significantly less expensive than similar products sold by Dransfield's competitors. Order-processing time is very short; however, approximately 10% of products are defective and returned by the customer. Returns and refunds are handled promptly. Yorunt Manufacturing, Dransfield's main competitor, has a higher priced product with almost no defects, but a longer order-processing time.

-Draw a simple customer preference map for Dransfield and Yorunt using the attributes of price, quality, and delivery time.

-Is Dransfield's current strategy that of product differentiation or cost leadership?

-Dransfield would like to improve quality without significantly increasing costs or order- processing time. Dransfield's managers believe the increased quality will increase sales. What elements should Dransfield include in its balanced scorecard?

-Draw a strategy map to explain cause-and-effect relationships in Dransfield's balanced scorecard.