Question 1

Marketing,selling,distribution,and administrative expenses are dependent on the volume and mix of products that the company produces.

Accepted Answer

A) True 
 B)False

Question 2

Persuading customers to use a greater score of the company's products and services is an example of:

Accepted Answer

A) process improvements. 
B) activity based pricing. 
C) managing relationships. 
D) the pricing waterfall. 
A) process improvements. 
B) activity based pricing. 
C) managing relationships. 
D) the pricing waterfall.

Question 3

Compare the 80-20 rule and the whale curve as it relates to customer profitability.

Accepted Answer

Although the 80-20 law applies well to s

Question 4

The whale curve shows:

Accepted Answer

A) the most profitable 20% of customers generate about 180% of sales. 
B) the most profitable 20% of customers generate about 80% of total sales. 
C) the most profitable 20% of customers generate about 80% of total profits. 
D) the most profitable 20% of customers generate about 180% of total profits. 
A) the most profitable 20% of customers generate about 180% of sales. 
B) the most profitable 20% of customers generate about 80% of total sales. 
C) the most profitable 20% of customers generate about 80% of total profits. 
D) the most profitable 20% of customers generate about 180% of total profits.

Question 5

Omega Company has the following two customers:  
If the company pays a 2% sales commission based on revenue,this will encourage a salespersons' efforts to sell to:

Accepted Answer

A) Woodruff, an unprofitable customer. 
B) Woodruff, a profitable customer. 
C) Ensley, an unprofitable customer. 
D) Ensley,a profitable customer. 
A) Woodruff, an unprofitable customer. 
B) Woodruff, a profitable customer. 
C) Ensley, an unprofitable customer. 
D) Ensley,a profitable customer.

Question 6

The 80/20 rules states that the top 20% of customers generate 80% of revenues.

Accepted Answer

A) True 
 B)False

Question 7

Discuss the issues related to excessive focus on nonfinancial customer metrics such as customer loyalty and satisfaction.

Accepted Answer

An excessive focus on improving customer

Question 8

Brent Company's cost system assigns MSDA expenses to customers using a rate of 33% of sales revenue.The new CFO has discovered that Brent's customers differ greatly in their ordering patterns and interaction with Brent's sales force.Because the CFO believes Brent's cost system does not accurately assign MSDA expenses to customers,he developed an ABC system and gathered the following information.
   
Required:
(a)Using the current cost system's approach of assigning MSDA expenses to customers using a rate of 33% of sales revenue,determine the operating profit associated with Austin and with Brooke.
(b)Using the activity-based costing information provided,determine the operating profit associated with Austin and with Brooke.
(c)Which of the two methods produces more accurate assignments of MSDA expenses to customers? Explain.

Accepted Answer

@#IMG-DLM& 
(c)
The activity-based costing method

Question 9

Discounts given to encourage large purchases are known as sales discounts.

Accepted Answer

A) True 
 B)False

Question 10

Low cost to serve customers:

Accepted Answer

A) have low order quantities. 
B) have large amounts of post sales support. 
C) order standard products. 
D) have customized delivery. 
A) have low order quantities. 
B) have large amounts of post sales support. 
C) order standard products. 
D) have customized delivery.

Question 11

Customer loyalty is characterized by a customer's attitude toward a product or company.

Accepted Answer

A) True 
 B)False

Question 12

Customers that require a low price and lots of customized service are:

Accepted Answer

A) high cost to serve and low margin. 
B) low cost to serve and low margin. 
C) high cost to serve and high margin. 
D) low cost to serve and high margin. 
A) high cost to serve and low margin. 
B) low cost to serve and low margin. 
C) high cost to serve and high margin. 
D) low cost to serve and high margin.

Question 13

Customer profitability:

Accepted Answer

A) is reflected by gross margin. 
B) are most accurately measured using traditional costing. 
C) are most accurately measured using activity based costing. 
D) are most accurately measured using a combination of traditional costing and activity based costing. 
A) is reflected by gross margin. 
B) are most accurately measured using traditional costing. 
C) are most accurately measured using activity based costing. 
D) are most accurately measured using a combination of traditional costing and activity based costing.

Question 14

What are the four options that manufacturing and service companies have to transform breakeven or loss customers into profitable ones?

Accepted Answer

Manufacturing and service companies alik

Question 15

High cost to serve customers:

Accepted Answer

A) have high order quantities. 
B) have large amounts of post sales support. 
C) order standard products. 
D) have little to no pre-sales support. 
A) have high order quantities. 
B) have large amounts of post sales support. 
C) order standard products. 
D) have little to no pre-sales support.

Question 16

MSDA expenses as a percentage of sales is an effective way to measure customer profitability.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is NOT part of the pricing waterfall chart?

Accepted Answer

A) dealer list price 
B) customer discount price 
C) invoice price 
D) actual net price 
A) dealer list price 
B) customer discount price 
C) invoice price 
D) actual net price

Question 18

Customers are price sensitive with few special demands are:

Accepted Answer

A) high cost to serve and low margin. 
B) low cost to serve and low margin. 
C) high cost to serve and high margin. 
D) low cost to serve and high margin. 
A) high cost to serve and low margin. 
B) low cost to serve and low margin. 
C) high cost to serve and high margin. 
D) low cost to serve and high margin.

Question 19

The 80/20 rule:

Accepted Answer

A) finds that 80% of revenues are generated by the top 20% of the customers. 
B) finds that 80% of profits are generated by the top 20% of the customers. 
C) can be graphed as the whale curve. 
D) finds that 80% of costs are generated by 20% of the customers. 
A) finds that 80% of revenues are generated by the top 20% of the customers. 
B) finds that 80% of profits are generated by the top 20% of the customers. 
C) can be graphed as the whale curve. 
D) finds that 80% of costs are generated by 20% of the customers.

Question 20

Many costs of marketing,selling,and distribution expenses are incurred not to support individual products or product lines,but rather to support customers,market segments or distribution channels.

Accepted Answer

A) True 
 B)False

Marketing,selling,distribution,and administrative expenses are dependent on the volume and mix of products that the company produces.

Persuading customers to use a greater score of the company's products and services is an example of:

Compare the 80-20 rule and the whale curve as it relates to customer profitability.

The whale curve shows:

Omega Company has the following two customers: If the company pays a 2% sales commission based on revenue,this will encourage a salespersons' efforts to sell to:

The 80/20 rules states that the top 20% of customers generate 80% of revenues.

Discuss the issues related to excessive focus on nonfinancial customer metrics such as customer loyalty and satisfaction.

Discounts given to encourage large purchases are known as sales discounts.

Low cost to serve customers:

Customer loyalty is characterized by a customer's attitude toward a product or company.

Customers that require a low price and lots of customized service are:

Customer profitability:

What are the four options that manufacturing and service companies have to transform breakeven or loss customers into profitable ones?

High cost to serve customers:

MSDA expenses as a percentage of sales is an effective way to measure customer profitability.

Which of the following is NOT part of the pricing waterfall chart?

Customers are price sensitive with few special demands are:

The 80/20 rule:

Many costs of marketing,selling,and distribution expenses are incurred not to support individual products or product lines,but rather to support customers,market segments or distribution channels.

How Management Accounting Information Supports Decision Making

The Balanced Scorecard and Strategy Map

Using Costs in Decision Making

Accumulating and Assigning Costs to Products

Activity-Based Cost Systems

Measuring and Managing Process Performance

Measuring and Managing Life-Cycle Costs

Behavioral and Organizational Issues in Management Accounting and Control Systems

Using Budgets for Planning and Coordination

Financial Control

Filters

Exam 6: Measuring and Managing Customer Relationships

Marketing,selling,distribution,and administrative expenses are dependent on the volume and mix of products that the company produces.

Persuading customers to use a greater score of the company's products and services is an example of:

Compare the 80-20 rule and the whale curve as it relates to customer profitability.

The whale curve shows:

Omega Company has the following two customers: If the company pays a 2% sales commission based on revenue,this will encourage a salespersons' efforts to sell to:

The 80/20 rules states that the top 20% of customers generate 80% of revenues.

Discuss the issues related to excessive focus on nonfinancial customer metrics such as customer loyalty and satisfaction.

Discounts given to encourage large purchases are known as sales discounts.

Low cost to serve customers:

Customer loyalty is characterized by a customer's attitude toward a product or company.

Customers that require a low price and lots of customized service are:

Customer profitability:

What are the four options that manufacturing and service companies have to transform breakeven or loss customers into profitable ones?

High cost to serve customers:

MSDA expenses as a percentage of sales is an effective way to measure customer profitability.

Which of the following is NOT part of the pricing waterfall chart?

Customers are price sensitive with few special demands are:

The 80/20 rule:

Many costs of marketing,selling,and distribution expenses are incurred not to support individual products or product lines,but rather to support customers,market segments or distribution channels.

How Management Accounting Information Supports Decision Making

The Balanced Scorecard and Strategy Map

Using Costs in Decision Making

Accumulating and Assigning Costs to Products

Activity-Based Cost Systems

Measuring and Managing Process Performance

Measuring and Managing Life-Cycle Costs

Behavioral and Organizational Issues in Management Accounting and Control Systems

Using Budgets for Planning and Coordination

Financial Control

Filters