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Following a Strategy of Product Differentiation, Janzen Inc Janzen Inc

question 35

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Following a strategy of product differentiation, Janzen Inc. makes a high-end product entitled "40H.". Janzen Inc. presents the following data for the years 2011 and 2012: 20112012 Units of 40H started $21,000$22,000 Selling price $300$320 Direct materials cost per square foot $50,000$51,500 Direct materials square feet 3032 Manufacturing capacity for 40H (units)  30,00030,000 Total conversion costs $1,500,000$1,600,000 Conversion costs per unit of capacity $30$34 Selling and customer service capacity (number of customers)  7068 Total selling and customer service costs $460,000$462,500 Cost per customer of selling and customer service capacity $7,000$7,250\begin{array} { l r r } & \mathbf { 2 0 1 1 } & \mathbf { 2 0 1 2 } \\\text { Units of } 40 \mathrm { H } \text { started } & \$ 21,000 & \$ 22,000 \\\text { Selling price } & \$ 300 & \$ 320 \\\text { Direct materials cost per square foot } & \$ 50,000 & \$ 51,500 \\\text { Direct materials square feet } & 30 & 32 \\\text { Manufacturing capacity for } 40 \mathrm { H } \text { (units) } & 30,000 & 30,000 \\\text { Total conversion costs } & \$ 1,500,000 & \$ 1,600,000 \\\text { Conversion costs per unit of capacity } & \$ 30 & \$ 34 \\\text { Selling and customer service capacity (number of customers) } & 70 & 68 \\\text { Total selling and customer service costs } & \$ 460,000 & \$ 462,500 \\\text { Cost per customer of selling and customer service capacity } & \$ 7,000 & \$ 7,250\end{array} Janzen Inc. produces no defective units but it wants to reduce the direct materials usage per unit of 40H in 2012. Manufacturing conversion costs in each year depend upon production capacity defined in terms of the number of 40H units that can be produced. Selling and customer-service costs depend upon the number of customers that the customer and service functions are designed to support. Janzen Inc. had 55 customers in 2011 and 62 customers in 2012. The industry market for 40H units increased by 6% from 2011 to 2012. Which of the following is a measure of the customer perspective?


Definitions:

Centralized Marketing Structures

Organizational layouts where decision-making and marketing activities are concentrated in a single or few locations, often at the headquarters.

Operational Excellence

an element of organizational leadership that stresses the application of a variety of principles, systems, and tools toward the sustainable improvement of key performance metrics.

Customer Intimacy

A business strategy focusing on personalizing service and building close relationships with customers to meet their specific needs.

Marketing Implementation

The process of executing a marketing plan, turning strategies and plans into marketing actions to accomplish strategic marketing objectives.

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