Question 1

Service companies:

Accepted Answer

A) focus more on customer costs and profitability than manufacturing companies. 
B) are less customer driven than manufacturing companies.. 
C) have less variation in demand for organizational resources. 
D) None of the above 
A) focus more on customer costs and profitability than manufacturing companies. 
B) are less customer driven than manufacturing companies.. 
C) have less variation in demand for organizational resources. 
D) None of the above

Question 2

Aggressive customers who demand low prices and customized services:

Accepted Answer

A) require high costs to serve. 
B) are most profitable to serve. 
C) are customers to eliminate. 
D) require high costs and are most profitable to serve. 
A) require high costs to serve. 
B) are most profitable to serve. 
C) are customers to eliminate. 
D) require high costs and are most profitable to serve.

Question 3

The 40-1 rule demonstrates that the top customers generate revenues at a rate of 40-1 over all other customers.

Accepted Answer

A) True 
 B)False

Question 4

Activity based costing can be used to trace revenue deductions such as discounts to individual orders and customers.

Accepted Answer

A) True 
 B)False

Question 5

One option to transform breakeven or loss customers into profitable customers is to use more discipline in granting discounts and allowances.

Accepted Answer

A) True 
 B)False

Question 6

Describe the pricing waterfall.

Accepted Answer

The pricing waterfall charts t

Question 7

Omega Company has the following two customers:  
If the company pays a 4% sales commission based on customer profit,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 8

Establishing a base price for producing and delivering a standard quantity of each standard product 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 9

Customer financial performance:

Accepted Answer

A) are best measured with financial metrics. 
B) are reflected on the balanced scorecard as part of the learning and growth perspective. 
C) can be improved by offering special features, and highly responsive customer service. 
D) is improved by focusing on a combination of financial and nonfinancial metrics. 
A) are best measured with financial metrics. 
B) are reflected on the balanced scorecard as part of the learning and growth perspective. 
C) can be improved by offering special features, and highly responsive customer service. 
D) is improved by focusing on a combination of financial and nonfinancial metrics.

Question 10

Based on the following company data,what is the net promoter score?

Accepted Answer

A) 2.18% 
B) 38.12% 
C) 12.82% 
D) 5.88% 
A) 2.18% 
B) 38.12% 
C) 12.82% 
D) 5.88%

Question 11

Repeated or increased purchases of the product or service is known as?

Accepted Answer

A) profitability 
B) customer satisfaction 
C) customer loyalty 
D) the net promoter score 
A) profitability 
B) customer satisfaction 
C) customer loyalty 
D) the net promoter score

Question 12

What is the customer lifetime value of customer W.Harrelson for the first three years of the customer relationship?

Accepted Answer

A) $825.12 
B) $2,925.12 
C) $6,390.00 
D) $4,190.00 
A) $825.12 
B) $2,925.12 
C) $6,390.00 
D) $4,190.00

Question 13

Typical sales person's compensation:

Accepted Answer

A) is paid in the form of salary. 
B) encourages sales only to profitable customers. 
C) is usually based on customer profit. 
D) is usually based on sales revenue. 
A) is paid in the form of salary. 
B) encourages sales only to profitable customers. 
C) is usually based on customer profit. 
D) is usually based on sales revenue.

Question 14

Which of the following is not a critical parameter for calculating customer lifetime value?

Accepted Answer

A) initial acquisition cost 
B) revenues 
C) profits or losses 
D) the duration of the relationship 
A) initial acquisition cost 
B) revenues 
C) profits or losses 
D) the duration of the relationship

Question 15

Companies base salespeople's compensation on net income because it is simple to measure.

Accepted Answer

A) True 
 B)False

Question 16

Many companies quantify their customer relationships by using nonfinancial metrics on satisfaction and loyalty.

Accepted Answer

A) True 
 B)False

Question 17

Customer lifetime value is the discounted net cash flows from the customer for all of the years that it remains a customer compared to the initial acquisition cost to obtain the lifetime relationship with the customer.

Accepted Answer

A) True 
 B)False

Question 18

Companies should avoid high cost-to-serve customers because they are unprofitable.

Accepted Answer

A) True 
 B)False

Question 19

For service companies,in contrast,customer behavior determines the quantity of demands for organizational resources that produce and deliver the service to customers.

Accepted Answer

A) True 
 B)False

Question 20

How do customer costs differ in service companies when compared to manufacturing companies? Discuss customer independent and customer specific costs.

Accepted Answer

Service companies must focus, even more

Service companies:

Aggressive customers who demand low prices and customized services:

The 40-1 rule demonstrates that the top customers generate revenues at a rate of 40-1 over all other customers.

Activity based costing can be used to trace revenue deductions such as discounts to individual orders and customers.

One option to transform breakeven or loss customers into profitable customers is to use more discipline in granting discounts and allowances.

Describe the pricing waterfall.

Omega Company has the following two customers: If the company pays a 4% sales commission based on customer profit,this will encourage a salespersons' efforts to sell to:

Establishing a base price for producing and delivering a standard quantity of each standard product is an example of:

Customer financial performance:

Based on the following company data,what is the net promoter score?

Repeated or increased purchases of the product or service is known as?

What is the customer lifetime value of customer W.Harrelson for the first three years of the customer relationship?

Typical sales person's compensation:

Which of the following is not a critical parameter for calculating customer lifetime value?

Companies base salespeople's compensation on net income because it is simple to measure.

Many companies quantify their customer relationships by using nonfinancial metrics on satisfaction and loyalty.

Customer lifetime value is the discounted net cash flows from the customer for all of the years that it remains a customer compared to the initial acquisition cost to obtain the lifetime relationship with the customer.

Companies should avoid high cost-to-serve customers because they are unprofitable.

For service companies,in contrast,customer behavior determines the quantity of demands for organizational resources that produce and deliver the service to customers.

How do customer costs differ in service companies when compared to manufacturing companies? Discuss customer independent and customer specific costs.

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

Service companies:

Aggressive customers who demand low prices and customized services:

The 40-1 rule demonstrates that the top customers generate revenues at a rate of 40-1 over all other customers.

Activity based costing can be used to trace revenue deductions such as discounts to individual orders and customers.

One option to transform breakeven or loss customers into profitable customers is to use more discipline in granting discounts and allowances.

Describe the pricing waterfall.

Omega Company has the following two customers: If the company pays a 4% sales commission based on customer profit,this will encourage a salespersons' efforts to sell to:

Establishing a base price for producing and delivering a standard quantity of each standard product is an example of:

Customer financial performance:

Based on the following company data,what is the net promoter score?

Repeated or increased purchases of the product or service is known as?

What is the customer lifetime value of customer W.Harrelson for the first three years of the customer relationship?

Typical sales person's compensation:

Which of the following is not a critical parameter for calculating customer lifetime value?

Companies base salespeople's compensation on net income because it is simple to measure.

Many companies quantify their customer relationships by using nonfinancial metrics on satisfaction and loyalty.

Customer lifetime value is the discounted net cash flows from the customer for all of the years that it remains a customer compared to the initial acquisition cost to obtain the lifetime relationship with the customer.

Companies should avoid high cost-to-serve customers because they are unprofitable.

For service companies,in contrast,customer behavior determines the quantity of demands for organizational resources that produce and deliver the service to customers.

How do customer costs differ in service companies when compared to manufacturing companies? Discuss customer independent and customer specific costs.

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