A productivity index of 110% means that a company’s labor costs would have been 10% higher if it had not

made
production improvements. Now refer to the Income Statement in Digby's Annual Report. The direct labor costs for
Digby were $32,486. These labor costs could have been $20,000 higher if investments in training that increased
productivity had not been made. What was the productivity index for Digby that led to such savings?
Select: 1
155.4%
44.6%
161.6%
38.4%
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 $163,189,230. Assuming similar
sales next year, the 1.7% increase in demand will provide $2,774,217 of additional revenue. With the overall
contribution margin of 34.1%, after direct costs this revenue will add $946,008 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?
Select: 1
6 months
13 months
TQM investment will not have a significant financial impact
19 months
Bam's product manager is under pressure to increase market share, but is uncertain about how to make the
product more competitive. The product is reasonably well-positioned in the Thrift segment and enjoys relatively
high awareness and accessibility. Which of the following would most likely result in a quick increase in market
share?
Select: 1
Re-position the product to the ideal spot within the segment
Lower the unit selling price to the bottom limit of the segment price range
Increase the unit contribution margin by decreasing the MTBF
Increase awareness by 5%
According to information found on the production analysis page of the Inquirer, Chester sold 1126 units of Cat in
the current year. Assuming that Cat maintains a constant market share, all the units of Cat are sold in the Nano
market segment and the growth rate remains constant, how many years will it be before Cat will not be able to
meet future demand unless the company adds production capacity? Exclude any existing inventory.
Select: 1
3 year(s)
1 year(s)
2 year(s)
4 year(s)
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?
Select: 1
Andrews is a niche differentiator
Andrews is a broad differentiator
Andrews is a niche cost leader
Andrews is a broad cost leader
Deal is a product of the Digby company. Digby's sales forecast for Deal is 1853 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 Deal's Production After Adjustment have to be in order to have a 10% reserve of
units available for sale?
Select: 1
2038 units
1793 units
1608 units
1853 units
Chester's Elite product Cell has an awareness of 72%. Chester's Cell product manager for the Elite segment is
determined to have more awareness for Cell than Andrews' Elite product Art. 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 Cell's existing awareness is lost every year. Assuming that Art's awareness
stays the same next year (77%), out of the promotion budgets below, what is the minimum Chester's Elite
product manager should spend in promotion to earn more awareness than Andrews' Art product?
Select: 1
1M
2M
Nothing
3M
Bit is a product of the Baldwin company which is primarily in the Nano segment, but is also sold in another
segment. Baldwin starts to create their sales forecast by assuming all policies (R&D, Marketing, and Production)
for all competitors are equal this year over last. For this question assume that all 699 of units of Bit are sold in the
Nano segment. If the competitive environment remains unchanged what will be the Bit product’s demand next
year (in 000’s)?
Select: 1
1594
797
699
748
In order to sell a product at a profit the product must be priced higher than the total of what it costs you to build
the unit, plus period expenses, and plus overhead.

At the end of last year the broad cost leader Baldwin had an Elite product Bolt. Use the Inquirer's Production
Analysis to find Bolt's production cost, (labor+materials). Exclude possible inventory carrying costs. Assume
period expenses and overhead total 1/2 of their production cost. What is the minimum price the product could
have been sold for to cover the unit cost, period expenses, and overhead?
Select: 1
$32.18
$10.73
$21.45
$35.00
Looking forward to next year, if Chester’s current cash balance is $20,201 (000) and cash flows from operations
next period are unchanged from this period, and Chester 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 $400 (000) in bonds
Retires $10,000 (000) in debt

Which of the following activities will expose Chester to the most risk of needing an emergency loan?
Select: 1
Pays a $5.00 per share dividend
Liquidates the entire inventory
Purchases assets at a cost of $25,000 (000)
Sells $10,000 (000) of their long-term assets 
Currently Digby is paying a dividend of $20.68 (per share). If this dividend were raised by $3.64,
given its current stock price what would be the Dividend Yield?
Select: 1

$3.64

10.2%

12.0%

$24.32

Which company has the most efficient SG&A / Sales ratio?

Select: 1

Baldwin

Digby

Chester

Andrews

In the Month of March, Baldwin received orders of 172 units at a price of $15.00 for their product
Bid, and in April receives an order for 43 units of their product Bid at $15.00. Baldwin uses the
accrual method of accounting and offers 30 day credit terms. Baldwin delivers 0 units in March, 172
units in April and 43 units in May. They received payment for 172 units in April, and payment for 43
units in May. How much revenue is recognized on the March income statement from this order?
How much in the April Income statement? (Answer in thousands)
Select: 1

$1,075 , $1,075

$2,580 , $645

0, $2,580

$3,225 , 0

Your Competitive Intelligence team is predicting that the Baldwin Company will invest in adding
capacity to their Brat product this year. Assume Baldwin's product Brat invests in increasing its
capacity by 10% this year. Because of this new information, your company anticipates all other
products in the Core segment will increase their capacity by the same amount. How much can the
industry produce in the Core segment the next year? Consider only products primarily in the Core
segment last year. Ignore current inventories. Figures in thousands (000).
Select: 1

7,275
4,625

9,502

8,252

8,525

7,543

12,925

Last year Aft charged $1,237,600 Depreciation on the Income Statement of Andrews. If early this
year Aft purchased a new depreciable asset, the effect on Andrews's financial statements would be
(all other items remaining equal):
Select: 1

No impact on Net Cash from operations

Just impact the Balance Sheet

Increase Net Cash from operations

Decrease Net Cash from operations on the Cash Flow Statement

Assume Baldwin Corp. is downsizing the size of their workforce by 15% (to the nearest person) next
year from various strategic initiatives. Baldwin is planning to conduct exit interviews to learn more
about how they can improve in processes and increase productivity. The exit interviews are
estimated to cost $100 per employee in additional to normal separation costs of $5000. How much
will the company pay in separation costs if these exit interviews are implemented next year?
Select: 1

$120,330

$681,870

$1,655,970

$292,230

Assume Baldwin is producing 2,945 units of Bold next year. What would Bold's plant utilization be?
Select: 1

109.44%

155.00%
158.10%

151.90%

Baldwin's balance sheet has $94,142,000 in equity. Next year they expect Assets to increase by
$4,000,000 and Liabilities to decrease by $2,000,000. If that happens, what will be Baldwin's book
value?
Select: 1

$45,014,000

$100,142,000

$96,142,000

$88,142,000
1.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? 
Select: 1 
Dell 
Cake 
Cedar 
Adam 

2.Baldwin currently has $17,478 (000) in cash and management has decided to issue stocks and bonds
worth an additional $8,000 (000). Assuming that cash from operations will be the same for each of the
following activities, which activity exposes this company to the most risk of being issued an
emergency loan? 
Select: 1 
Liquidate the entire inventory 
Purchasing $18,000 (000) worth of plant and equipment 
Retiring the oldest bond 
A $5 dividend 

3.Select all of the following statements that are true four years from now, in the year 2018. 
Select: 2 
The Nano segment will demand 5,411 thousand units 
The Elite segment will demand 5,878 thousand units 
The Core segment will demand 9,785 thousand units 
The Thrift segment will demand 7,751 thousand units 

4.A productivity index of 110% means that a company’s labor costs would have been 10% higher if it
had not made production improvements. Now refer to the Income Statement in Chester's Annual
Report. The direct labor costs for Chester were $32,680. These labor costs could have been $20,000
higher if investments in training that increased productivity had not been made. What was the
productivity index for Chester that led to such savings? 
Select: 1 
38.8% 
161.2% 
155.1% 
44.9% 

5.Investing $2,000,000 in TQM's Channel Support Systems initiative will at a minimum increase
demand for your products 3.0% 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 $163,608,638. Assuming similar sales next year, the 3.0% increase in demand will
provide $4,908,259 of additional revenue. With the overall contribution margin of 34.2%, after direct
costs this revenue will add $1,678,625 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 $2,000,000 TQM investment, rounded to the nearest month? 
Select: 1 
14 months 
TQM investment will not have a significant financial impact 
10 months 
5 months 
6.From a marginal analysis perspective, what is the inventory carry cost for Andrews if the company
carries one additional unit of Able in inventory at the end? 
Select: 1 
$13.57 
$6.34 
$3.17 
$1.63 

7.In three years, assuming the competitive environment remains unchanged, how many units of Baker
will Baldwin be selling in the Nano market segment? 
Select: 1 
561 
432 
716 
639 

8.Assuming no direct factory overhead costs (i.e., inventory carry costs) and $3 million dollars in
combined promotion and sales budget, the Dot 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? 
Select: 1 
$21.00 
$24.50 
$23.00 
$22.75 

9.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? 
Select: 1 
Andrews is a broad differentiator 
Andrews is a niche cost leader 
Andrews is a broad cost leader 
Andrews is a niche differentiator 

10.Baldwin's Elite product Bead has an awareness of 72%. Baldwin's Bead product manager for the
Elite segment is determined to have more awareness for Bead than Andrews' Elite product Acre. 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 Bead's existing awareness is
lost every year. Assuming that Acre's awareness stays the same next year (77%), out of the promotion
budgets below, what is the minimum Baldwin's Elite product manager should spend in promotion to
earn more awareness than Andrews' Acre product? 
Select: 1 
Nothing 
3M 
1M 
2M 
Assume Baldwin is producing 1,425 units of Best next year. What would Best's plant
utilization be?
Answer:
1,425/1500 = 0.95 = 95% Option 3