ch13tif-1 - CHAPTER 13: STRATEGY PROFITABILITY ANALYSIS 59....

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Unformatted text preview: CHAPTER 13: STRATEGY PROFITABILITY ANALYSIS 59. Which component measures the changes in operating income attributed solely to an increase in the quantity of output between Year 1 and Year 2? a. The growth component b. The price-recovery component c. The productivity component d. The cost leadership component Answer : a Difficulty : 1 Objective : 4 60. Which component measures the change in operating income attributable solely to changes in a companys profit margins between Year 1 and Year 2? a. The growth component b. The price-recovery component c. The productivity component d. The cost leadership component Answer : b Difficulty : 1 Objective : 4 Chapter 13 Page 1 61. Which component measures the reduction in costs attributable to a reduction in the quantity of inputs used in Year 2 relative to the quantity of inputs that would have been used in Year 1 to produce the Year 2 output? a. The growth component b. The price-recovery component c. The productivity component d. The cost leadership component Answer : c Difficulty : 1 Objective : 4 62. When analyzing the change in operating income, the growth component a. calculations are similar to the selling-price variance calculations. b. isolates the change attributed solely to an increase in market share. c. isolates the change attributed solely to an increase in industry growth. d. isolates the change attributed solely to an increase in the quantity of units sold. Answer : d Difficulty : 3 Objective : 4 63. When analyzing the change in operating income, the price-recovery component a. calculations are similar to the efficiency-variance calculations. b. compares the change in output price with the changes in input prices. c. will report a large positive amount when a company has successfully pursued the cost leadership strategy. d. isolates the change attributed solely to an increase in production efficiencies. Answer : b Difficulty : 3 Objective : 4 64. When analyzing the change in operating income, the productivity component a. calculations are similar to the sales-volume variance calculations. b. compares the change in output price with the changes in input prices. c. will report a large positive amount when a company has successfully pursued the cost leadership strategy. d. isolates the change attributed solely to an increase in the quantity of units sold. Answer : c Difficulty : 3 Objective : 4 65. When analyzing the change in operating income, the growth component will increase when a. capacity is reduced. b. production efficiencies are successfully implemented. c. selling prices are increased. d. more units are sold. Answer : d Difficulty : 3 Objective : 4 Chapter 13 Page 2 66. When analyzing the change in operating income, the price-recovery component will increase when a. capacity is reduced....
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This note was uploaded on 08/28/2010 for the course ACCTG 101 taught by Professor Smith during the Spring '10 term at Alabama State University.

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ch13tif-1 - CHAPTER 13: STRATEGY PROFITABILITY ANALYSIS 59....

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