Question 1

Additional costs to serve and retain the customer in year t is represented in the customer lifetime value equation as ct.

Accepted Answer

A) True 
 B)False

Question 2

The whale curve:

Accepted Answer

A) graphs sales verses customers. 
B) graphs profits verses customers. 
C) graphs the 80/20 rule. 
D) finds that 80% of costs are generated by 20% of the customers. 
A) graphs sales verses customers. 
B) graphs profits verses customers. 
C) graphs the 80/20 rule. 
D) finds that 80% of costs are generated by 20% of the customers.

Question 3

The rate per hour of each order entry employee is $56.00 per hour.On average,it takes an order entry employee about 0.1 hour to enter the basic customer information for a manual customer order.In addition,manual orders require an operator to spend an additional 0.02 hour to enter each line item on the order.What is the order entry cost associated with a manual order with 10 line items?

Accepted Answer

A) $0.30 
B) $5.60 
C) $11.20 
D) $16.80 
A) $0.30 
B) $5.60 
C) $11.20 
D) $16.80

Question 4

The whale curve shows that the middle 60% of customers generate the majority of total profits.

Accepted Answer

A) True 
 B)False

Question 5

Describe five reasons that loyal customers are valuable.

Accepted Answer

1. Loyal customers have a greater likeli

Question 6

Customized delivery is a characteristic of a high cost-to-serve customer.

Accepted Answer

A) True 
 B)False

Question 7

________ uses measurements of customer attitudes toward the product or service.

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 8

Baker company has 40 order operators with associated costs of $2,000,000 per year.Baker calculated that each operator worked about 2,000 hours per year.Allowing for time off,each operator provided about 1,600 or productive work per year.On average,it takes an order entry employee about 0.2 hour to enter the basic customer information for a manual customer order.In addition,manual orders require an operator to spend an additional 0.04 hour to enter each line item on the order.
a.What is the rate per hour for each order entry employee?
b.What is the order entry cost associated with a manual order with 10 line items?

Accepted Answer

a. $2,000,000/40 operators = $

Question 9

Customer loyalty may be low regardless of the customer's attitude toward the product or the company in highly competitive industries,characterized by low differentiation among products,with many substitutes and a low cost of switching.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

The net promoter score = 12.82

Question 11

Marketing,selling,distribution,and administrative expenses:

Accepted Answer

A) can be traced through causal relationships to products. 
B) are independent of volume and product mix. 
C) are usually incurred through a single distribution channel. 
D) do not work well with activity based costing. 
A) can be traced through causal relationships to products. 
B) are independent of volume and product mix. 
C) are usually incurred through a single distribution channel. 
D) do not work well with activity based costing.

Question 12

Compute the customer lifetime value of Customer 222 based on the data below for the first six years of the customer relationship.Costs (ct)were incurred to promote customer retention at a rate of 0.8 in years 1 through 6.

Accepted Answer

The customer lifetime value, CLV, for Cu

Additional costs to serve and retain the customer in year t is represented in the customer lifetime value equation as ct.

The whale curve:

The whale curve shows that the middle 60% of customers generate the majority of total profits.

Describe five reasons that loyal customers are valuable.

Customized delivery is a characteristic of a high cost-to-serve customer.

________ uses measurements of customer attitudes toward the product or service.

Customer loyalty may be low regardless of the customer's attitude toward the product or the company in highly competitive industries,characterized by low differentiation among products,with many substitutes and a low cost of switching.

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

Marketing,selling,distribution,and administrative expenses:

Compute the customer lifetime value of Customer 222 based on the data below for the first six years of the customer relationship.Costs (ct)were incurred to promote customer retention at a rate of 0.8 in years 1 through 6.

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

Additional costs to serve and retain the customer in year t is represented in the customer lifetime value equation as ct.

The whale curve:

The whale curve shows that the middle 60% of customers generate the majority of total profits.

Describe five reasons that loyal customers are valuable.

Customized delivery is a characteristic of a high cost-to-serve customer.

________ uses measurements of customer attitudes toward the product or service.

Customer loyalty may be low regardless of the customer's attitude toward the product or the company in highly competitive industries,characterized by low differentiation among products,with many substitutes and a low cost of switching.

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

Marketing,selling,distribution,and administrative expenses:

Compute the customer lifetime value of Customer 222 based on the data below for the first six years of the customer relationship.Costs (ct)were incurred to promote customer retention at a rate of 0.8 in years 1 through 6.

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