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