Reference no: EM132728033

1. Investing $1,500,000 in TQM's Channel Support Systems initiative will at a minimum increase demand for your products 1.7% in this and in all future rounds. (Refer to the TQM Initiative worksheet in the CompXM Decisions menu.) Looking at the Round 0 Inquirer for Andrews, last year's sales were $163,290,917. Assuming similar sales next year, the 1.7% increase in demand will provide $2,775,946 of additional revenue. With the overall contribution margin of 34.1%, after direct costs this revenue will add $946,598 to the bottom line. For simplicity, assume that the demand increase and margins will remain at last year's levels. How long will it take to achieve payback on the initial $1,500,000 TQM investment, rounded to the nearest month?

A. 13 months
B. TQM investment will not have a significant financial impact
C. 19 months
D. 6 months

2. In three years, assuming the competitive environment remains unchanged, how many units of Cute will Chester be selling in the Nano market segment?

A. 687
B. 603
C. 464
D. 764

3. Assuming no direct factory overhead costs (i.e., inventory carry costs) and $3 million dollars in combined promotion and sales budget, the Crimp product manager wishes to achieve a product contribution margin of 35%. Given their product currently is priced at $35.00, what would they need to limit the material and labor costs to?

A. $22.75
B. $24.50
C. $21.00
D. $23.00

4. According to information found on the production analysis page of the Inquirer, Digby sold 1127 units of Dino in the current year. Assuming that Dino maintains a constant market share, all the units of Dino are sold in the Nano market segment and the growth rate remains constant, how many years will it be before Dino will not be able to meet future demand unless the company adds production capacity? Exclude any existing inventory.

A. 1 year(s)
B. 2 year(s)
C. 3 year(s)
D. 4 year(s)

5. Which description best fits Andrews? For clarity: - A differentiator competes through good designs, high awareness, and easy accessibility. - A cost leader competes on price by reducing costs and passing the savings to customers. - A broad player competes in all parts of the market. - A niche player competes in selected parts of the market. Which of these four statements best describes your company's current strategy?

A. Andrews is a broad differentiator
B. Andrews is a broad cost leader
C. Andrews is a niche differentiator
D. Andrews is a niche cost leader

6. Dome is a product of the Digby company. Digby's sales forecast for Dome is 505 units. Digby wants to have an extra 10% of units on hand above and beyond their forecast in case sales are better than expected. (They would risk the possibility of excess inventory carrying charges rather than risk lost profits on a stock out.) Taking current inventory into account, what will Dome's Production After Adjustment have to be in order to have a 10% reserve of units available for sale?

A. 505 units
B. 556 units
C. 356 units
D. 406 units

7. Digby's Elite product Dome has an awareness of 72%. Digby's Dome product manager for the Elite segment is determined to have more awareness for Dome than Andrews' Elite product Ace. She knows that the first $1M in promotion generates 22% new awareness, the second million adds 23% more and the third million adds another 5%. She also knows one-third of Dome's existing awareness is lost every year. Assuming that Ace's awareness stays the same next year (77%), out of the promotion budgets below, what is the minimum Digby's Elite product manager should spend in promotion to earn more awareness than Andrews' Ace product?

A. 2M
B. Nothing
C. 1M
D. 3M

8. Demand is created through meeting customer buying criteria, credit terms, awareness (promotion) and accessibility (distribution). According to the Thrift segment's customers, which of these products was the most competitive at the end of last year?

A. Bit
B. Bolt
C. Cozy
D. Awe

9. Looking forward to next year, if Digby's current cash balance is $19,378 (000) and cash flows from operations next period are unchanged from this period and Digby takes ONLY the following actions relating to cash flows from investing and financing activities: Issues 100 (000) shares of stock at the current stock price Issues $200 (000) of long-term debt Pays $40 (000) in dividends Which of the following activities will expose Digby to the most risk of needing an emergency loan?

A. Liquidates the entire inventory
B. Retires $20,000 (000) in long-term debt
C. Sells $5,000 (000) of their Long-term assets
D. Purchases assets at a cost of $15,000 (000)

10. A productivity index of 110% means that a company's labor costs would have been 10% higher if it had not made production improvements. Assume that Baldwin had a productivity index of 112% and that Chester had a productivity index of 103%. Now refer to the Income Statements in the Annual Report for Baldwin and Chester. Using the labor costs shown in the Income Statements, how much more did Baldwin save in direct labor costs compared to Chester by having a higher productivity index?

A. $3,181
B. $2,863
C. $3,499
D. $3,340