Case Study: Accounting

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2-40 Strategic positioning
The emphasis in the case info on the product quality and craftsmanship, is the best described as differentiation on the quality of the product. In contrast, the company is more likely to succeed if it can continue to appeal to those customers looking for up-scale, higher quality table lamps and lighting fixtures. When using differentiation as the Company’s strategy, it becomes clear that maintaining the Classic line is critical to the company’s success. Thus, elimination of the line could damage the firm’s quality and craftsmanship image, and thus hurt the company’s strategic competitive advantage. Even if the Classic line is losing money for the company, it is important to both retain it and to publicize it, because it is the product line which most supports the company’s quality image. The classic line can be considered an example of what is sometimes called a loss leader, a product or service that draws attention to the company, but which in itself is not profitable.

2-43 The Balanced Scorecard
Sales trends, sales, by product|
Cost of Labor, |
Return on investment|
New investment, by product line|
Cost of supplies|

Internal( technology)|
Cycle time|
Productivity measures, hour per product|
Equipment checking , new machine|

Training hours, new program, productivity|
Advices about the job|

Lead time|
Satisfaction |
Number of customers|
Shipment and delivery|

3-57. Cost of Goods Manufactured ; Income Statement

Fair Wind Yachts, Inc.

Statement of Cost of Goods Manufactured

December 31, 2013

Direct Materials Used

Direct Materials Inventory, Beginning $16,000

Direct Materials Purchases $410,000

Total Direct Materials Available $426,000

Direct Materials Inventory, Ending <$18,000>

Direct Materials Used in 2013...
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