Sales Management FINAL (12)
Calculate the contribution for the homeowners division, if R&G had used the contribution-margin approach?
$30,000
If the division selling to homeowners was eliminated and the remaining costs were allocated to the commercial and institutional divisions, what would be the net profit/loss for the institutional division?
($19,000)
A company that manufactures livestock trailers, dog houses, portable utility buildings and carport covers wants to do a marketing cost analysis. Which of the following is the best example of a direct cost?
A brochure describing the features of its livestock trailers
Which of the following statements about how a manufacturers categorizes its costs and expenses is true?
A salesperson's salary would be a direct cost for his or her territory, but an indirect cost for the product sold
Marketing cost analysis can be used by sales managers to
All of the above
The essence of marketing cost analysis is to _____ cost data.
All of the above
Which of the following is the best example of a natural account?
All of the above
Which of the following statements describes a disadvantage associated with marketing cost analysis?
All of the above describes disadvantages associated with marketing cost analyses
In the contribution margin approach, any excess revenues costs
Contributes to common costs and profit
ROAM equals:
Contribution as a percentage of sales times and assets turnover rate
In the contribution margin approach, a _______ margin is calculated while in a full-cost approach a _______ margin is calculated.
Contribution; gross
The term________ is often restricted to the materials, labor, power, rent and other items used in making the product.
Cost
Alex is struggling with his company's new financial accounting system. He knows the key is to understand how _________ so that true profitability can be determined.
Costs are allocated
A manager is using a full-cost approach, then allocating fixed costs on the basis of sales volume as a way of analyzing marketing costs. This method could:
Create an environment where low-volume customers appear more profitable than they actually are
A(n) _________ can be specifically identified with a product of function.
Direct cost
What would an advocate of the full-cost approach to marketing cost analysis do with this information?
Eliminate the division that sells to homeowners
________ reflects the other costs incurred in operating a business, such as advertising.
Expenses
which of the following statements about the general procedure used to conduct a cost or profitability analysis is true?
Good profitability analyses require that the various cost be partitioned into direct and indirect expenses so the proper aggregations can be made
A(n) __________ is a shared cost tied to several functions or products.
Indirect cost
A company that manufactures specialized database-gathering software for retailers, physicians, lawyers, and anyone else that needs a database wants to do a marketing cost analysis. If it uses product as its objective of measurement, then a particular sales representative's compensation is an example of an:
Indirect cost and general expense
Contribution-margin advocates argue that:
It is misleading to allocate costs arbitrarily
Tyrone is attempting to measure the long-term value or profitability of his customers. Tyrone is measuring
Lifetime value of the customer
Which of the following is NOT one of the base for profitability analysis?
Management
Full-cost approach advocates argue that:
Many indirect costs can be assigned based on a demonstrated cost relationship
Which of the following statements about marketing cost analysis is true?
Marketing cost analysis focuses on the results achieved to determine if the returns justify the expenditures
EMI, a manufacturer of aluminum conveyor belts, allocates costs such as salaries, advertising, warehouse rent, office supplies and travel expenses. EMI uses the ______ approach to marketing cost analysis.
Net Profit
A company that manufactures lighting fixtures wants to do a marketing cost analysis based on customer (home owner, commercial and institutional). Which of the following is the best example of a general expense?
None of the above
When assessing segment performance, indirect costs should:
Not be allocated
Which of the following is the best example of a functional account?
Order processing
Olivia wants to better allocate her sales force. She gathers sales and cost data and studies the ___________ relationships.
Output/input
The warehousing expenses allocated to each salesperson would include:
Packaging costs for each product sold
If they do profitability analysis, companies are most likely to do it for
Products
Sales managers are typically LEAST concerned with the profitability of:
Products
Allocating costs by sales volume FAILS to:
Recognize the purpose of the cost incurred
In activity-based costing, the three informational components to the company are
Resources, activities, and cost objectives
While sales analysis focuses on _______, cost analysis looks at the costs ________ in producing those results.
Results achieved, incurred
Companies are more likely to conduct ________ analysis than profitability analysis.
Sales
Jerry wants to measure market productivity. He will focus on
Sales or profit per unit of marketing effort
The first step in conducting cost analysis is to:
Specify the purpose for which the study is being done
Which of the following statements about the use of ROAM is true?
The goal of ROAM is to reach an optimal level of investment
All of the following are disadvantages associated with a marketing cost analysis EXCEPT:
The lack of tangible profit as a result of such an analysis
Which of the following statements about how a manufacturer categorizes cost and expense is true?
The manufacturer of a laser printer would categorize the cost of shipping that printer as a specific expense
The determining factor of whether an expense is specific or general is:
The object of measurement being used
The real benefit of a marketing cost analysis is:
The opportunity it provides managers to isolate segments of the business that are most profitable as well as those that generate losses
Wilton is assessing the lifetime value of his customers. As part of his analysis, he will likely assess
The potential for new business
A key factor in determining the overall profitability of each customer is
The pricing authority of salespeople