Question 1

A manufacturer is likely to reduce the loss on small orders by:

Accepted Answer

A) Having salespeople call more frequently on small-order accounts. 
B) Bypassing the wholesalers and dealing directly with customers. 
C) Encouraging customers to buy on a hand-to-mouth basis. 
D) Reducing quantity discounts. 
E) Changing pricing structure to pass some of the costs on to the buyer. 
A) Having salespeople call more frequently on small-order accounts. 
B) Bypassing the wholesalers and dealing directly with customers. 
C) Encouraging customers to buy on a hand-to-mouth basis. 
D) Reducing quantity discounts. 
E) Changing pricing structure to pass some of the costs on to the buyer. E

Question 2

Sales force travel expenses would be:

Accepted Answer

A) an indirect territorial cost,but a direct product cost. 
B) a direct territorial cost,but an indirect product cost. 
C) a direct cost for both territorial and product analyses. 
D) an indirect cost for both territorial and product analyses. 
E) neither a direct nor an indirect cost. 
A) an indirect territorial cost,but a direct product cost. 
B) a direct territorial cost,but an indirect product cost. 
C) a direct cost for both territorial and product analyses. 
D) an indirect cost for both territorial and product analyses. 
E) neither a direct nor an indirect cost. B

Question 3

The task of allocating ledger expenses among the activity groups is relatively easy,because the ledger expenses all are direct expenses.

Accepted Answer

A) True 
 B)False  False

Question 4

In contrast to a sales-volume analysis,a marketing cost analysis will:

Accepted Answer

A) Give us an estimate of our share of market. 
B) Indicate our sales by products and by territories. 
C) Prevent an 80-20 situation from occurring in our firm. 
D) Determine the profitability of our products and territories. 
E) Prevent us from violating the Robinson-Patman Act regarding price discrimination. 
A) Give us an estimate of our share of market. 
B) Indicate our sales by products and by territories. 
C) Prevent an 80-20 situation from occurring in our firm. 
D) Determine the profitability of our products and territories. 
E) Prevent us from violating the Robinson-Patman Act regarding price discrimination.

Question 5

While it is a useful tool for financial analysis,the concept of Return on Assets Managed (ROAM)is not helpful when evaluating field sales managers.

Accepted Answer

A) True 
 B)False

Question 6

Each sales rep in our firm has his own territory and sells our three product lines.Ten reps operate out of each of our seven branches.Which of the following is most likely to be a direct territorial expense?

Accepted Answer

A) Rent for branch offices. 
B) Advertising product A in TIME magazine. 
C) Branch managers' salaries. 
D) General sales manager's salary. 
E) Sales rep's travel expenses. 
A) Rent for branch offices. 
B) Advertising product A in TIME magazine. 
C) Branch managers' salaries. 
D) General sales manager's salary. 
E) Sales rep's travel expenses.

Question 7

A reason for using the contribution-margin approach in a marketing cost analysis is that:

Accepted Answer

A) It tells management which territories or products are profitable. 
B) Arbitrarily allocating indirect expenses to individual territories or products can give misleading information to management. 
C) Ledger costs can be allocated into activity groups. 
D) Each marketing unit (product,territory,for example)should bear its full share of costs. 
E) This approach is especially useful as a basis for long-range planning. 
A) It tells management which territories or products are profitable. 
B) Arbitrarily allocating indirect expenses to individual territories or products can give misleading information to management. 
C) Ledger costs can be allocated into activity groups. 
D) Each marketing unit (product,territory,for example)should bear its full share of costs. 
E) This approach is especially useful as a basis for long-range planning.

Question 8

Management can increase its return on investment by:

Accepted Answer

A) Increasing its rate of profit on sales. 
B) Decreasing its expense while increasing its investments. 
C) Increasing its rate of capital (asset)turnover. 
D) Doing any of the above. 
E) Doing only two of the A-B-C above. 
A) Increasing its rate of profit on sales. 
B) Decreasing its expense while increasing its investments. 
C) Increasing its rate of capital (asset)turnover. 
D) Doing any of the above. 
E) Doing only two of the A-B-C above.

Question 9

A(n)is a detailed study of the operating expense section of a company's profit and loss statement.

Accepted Answer

A) Sales volume analysis. 
B) Marketing audit. 
C) Marketing cost analysis. 
D) Organizational audit. 
E) Financial statement. 
A) Sales volume analysis. 
B) Marketing audit. 
C) Marketing cost analysis. 
D) Organizational audit. 
E) Financial statement.

Question 10

The most beneficial (to management)type of marketing cost analysis is to study these costs:

Accepted Answer

A) As they appear in the ledger accounts - the "object-of-expenditure" costs. 
B) As they appear on a profit and loss statement. 
C) After they have been allocated to products,territories,or some other marketing unit. 
D) Before they have been grouped into activity classifications. 
E) Before they are split up into small segments. 
A) As they appear in the ledger accounts - the "object-of-expenditure" costs. 
B) As they appear on a profit and loss statement. 
C) After they have been allocated to products,territories,or some other marketing unit. 
D) Before they have been grouped into activity classifications. 
E) Before they are split up into small segments.

Question 11

The correct formula for determining rate of return on investment (ROI)is as follows: $\text { ROI } = \frac { \text { Net Profit } } { \text { Sales } } \times \frac { \text { Investment } } { \text { Sales } }$

Accepted Answer

A) True 
 B)False

Question 12

Suppose a marketing manager was conducting a marketing cost analysis.In doing so,she wanted to allocate activity costs to each of three sales offices.What would be the most appropriate approach for allocating personal selling expenses?

Accepted Answer

A) Selling expenses should be allocated to the sales office from which they were generated. 
B) Each sales office should assume one-third of the total sales expenses. 
C) Sales expenses should be allocated to each office on a basis proportionate to sales;that is,if sales were $15 million,$35 million,and $50 million,respectively,sales expenses for each office should be 15 percent,35 percent,and 50 percent of the total sales expenses. 
D) Sales expenses should be prorated according to the size of the force in each office. 
E) Each sales office should assume 30 percent of the total sales expenses with the remaining 10 percent charged to the home office for general sales administration. 
A) Selling expenses should be allocated to the sales office from which they were generated. 
B) Each sales office should assume one-third of the total sales expenses. 
C) Sales expenses should be allocated to each office on a basis proportionate to sales;that is,if sales were $15 million,$35 million,and $50 million,respectively,sales expenses for each office should be 15 percent,35 percent,and 50 percent of the total sales expenses. 
D) Sales expenses should be prorated according to the size of the force in each office. 
E) Each sales office should assume 30 percent of the total sales expenses with the remaining 10 percent charged to the home office for general sales administration.

Question 13

Which of the following is the best reason for using the contribution-margin approach in a marketing cost analysis by product line?

Accepted Answer

A) The net profit of each product line is what we are trying to determine. 
B) Full allocation of all costs is the best accounting practice. 
C) To go beyond allocation of measurable costs is to allocate indirect costs on an arbitrary basis. 
D) When analyzing marketing costs by products,all such costs are indirect. 
E) In the long run all costs must be covered. 
A) The net profit of each product line is what we are trying to determine. 
B) Full allocation of all costs is the best accounting practice. 
C) To go beyond allocation of measurable costs is to allocate indirect costs on an arbitrary basis. 
D) When analyzing marketing costs by products,all such costs are indirect. 
E) In the long run all costs must be covered.

Question 14

Regarding the relationship between marketing cost analysis and a company's accounting system:

Accepted Answer

A) A cost analysis is a complete historical record of financial activities. 
B) A cost analysis is more concerned with the planning and control of the future rather than the record of the past. 
C) A marketing cost analysis provides the data for the accounting system. 
D) Both are largely routine in nature,involving much record keeping. 
E) A cost analysis is a basic part of the accounting system. 
A) A cost analysis is a complete historical record of financial activities. 
B) A cost analysis is more concerned with the planning and control of the future rather than the record of the past. 
C) A marketing cost analysis provides the data for the accounting system. 
D) Both are largely routine in nature,involving much record keeping. 
E) A cost analysis is a basic part of the accounting system.

Question 15

One of the best arguments in favor of the full-cost approach to cost allocation is that:

Accepted Answer

A) It is easy to establish defensible bases of allocation. 
B) It is less expensive and less time consuming than the contribution-margin approach. 
C) The allocation bases are not as arbitrary as in the contribution margin approach. 
D) Management in the territory (or whatever marketing unit is being analyzed)is made more aware of all costs - direct and indirect - than is true under the contribution-margin method. 
E) In the long run all costs are variable. 
A) It is easy to establish defensible bases of allocation. 
B) It is less expensive and less time consuming than the contribution-margin approach. 
C) The allocation bases are not as arbitrary as in the contribution margin approach. 
D) Management in the territory (or whatever marketing unit is being analyzed)is made more aware of all costs - direct and indirect - than is true under the contribution-margin method. 
E) In the long run all costs are variable.

Question 16

In the contribution-margin approach in a marketing cost analysis,only the direct expenses are allocated to the marketing units being studied.

Accepted Answer

A) True 
 B)False

Question 17

Regarding a marketing cost analysis,cost is a function of volume.

Accepted Answer

A) True 
 B)False

Question 18

When a marketing cost analysis by territories shows a net loss for a territory,which of the following is management likely to do only as a last resort?

Accepted Answer

A) Abandon the losing territory. 
B) Reevaluate territorial boundaries. 
C) Use different channels to reach the market in that district. 
D) Increase the advertising appropriation for the district. 
E) Substitute mail or telephone selling instead of some of the personal calls by salespeople. 
A) Abandon the losing territory. 
B) Reevaluate territorial boundaries. 
C) Use different channels to reach the market in that district. 
D) Increase the advertising appropriation for the district. 
E) Substitute mail or telephone selling instead of some of the personal calls by salespeople.

Question 19

An argument in favor of the "full-cost" approach to cost allocation is:

Accepted Answer

A) In the long run all costs are fixed. 
B) With a good accounting system,we can accurately allocate any expense. 
C) Essentially,the whole purpose of a marketing cost analysis is to determine the net profitability of the marketing unit being studied. 
D) It is easy to establish defensible bases for allocating expenses. 
E) It is a good basis for short-run decision making at the district or regional sales force level. 
A) In the long run all costs are fixed. 
B) With a good accounting system,we can accurately allocate any expense. 
C) Essentially,the whole purpose of a marketing cost analysis is to determine the net profitability of the marketing unit being studied. 
D) It is easy to establish defensible bases for allocating expenses. 
E) It is a good basis for short-run decision making at the district or regional sales force level.

Question 20

A marketing cost analysis by territories often shows that the 80-20 principle is in effect.

Accepted Answer

A) True 
 B)False

A manufacturer is likely to reduce the loss on small orders by:

Sales force travel expenses would be:

The task of allocating ledger expenses among the activity groups is relatively easy,because the ledger expenses all are direct expenses.

In contrast to a sales-volume analysis,a marketing cost analysis will:

While it is a useful tool for financial analysis,the concept of Return on Assets Managed (ROAM)is not helpful when evaluating field sales managers.

Each sales rep in our firm has his own territory and sells our three product lines.Ten reps operate out of each of our seven branches.Which of the following is most likely to be a direct territorial expense?

A reason for using the contribution-margin approach in a marketing cost analysis is that:

Management can increase its return on investment by:

A(n)is a detailed study of the operating expense section of a company's profit and loss statement.

The most beneficial (to management)type of marketing cost analysis is to study these costs:

The correct formula for determining rate of return on investment (ROI)is as follows: $\text { ROI } = \frac { \text { Net Profit } } { \text { Sales } } \times \frac { \text { Investment } } { \text { Sales } }$

Suppose a marketing manager was conducting a marketing cost analysis.In doing so,she wanted to allocate activity costs to each of three sales offices.What would be the most appropriate approach for allocating personal selling expenses?

Which of the following is the best reason for using the contribution-margin approach in a marketing cost analysis by product line?

Regarding the relationship between marketing cost analysis and a company's accounting system:

One of the best arguments in favor of the full-cost approach to cost allocation is that:

In the contribution-margin approach in a marketing cost analysis,only the direct expenses are allocated to the marketing units being studied.

Regarding a marketing cost analysis,cost is a function of volume.

When a marketing cost analysis by territories shows a net loss for a territory,which of the following is management likely to do only as a last resort?

An argument in favor of the "full-cost" approach to cost allocation is:

A marketing cost analysis by territories often shows that the 80-20 principle is in effect.

The Field of Sales Force Management

Strategic Sales Force Management

Personal Selling Process

Sales Force Organization

Profiling and Recruiting Salespeople

Selecting and Hiring Applicants

Developing, Delivering, and Reinforcing a Sales Training Program

Motivating a Sales Force

Sales Force Compensation

Sales Force Quotas Expenses

Leadership of a Sales Force

Sales Forecasting and Developing Budgets

Sales Territories

Analysis of Sales Volume

Evaluating a Salespersons Performance

Ethical and Legal Responsibilities of Sales Managers

Filters

Exam 15: Marketing Cost and Profitability Analysis

A manufacturer is likely to reduce the loss on small orders by:

Sales force travel expenses would be:

The task of allocating ledger expenses among the activity groups is relatively easy,because the ledger expenses all are direct expenses.

In contrast to a sales-volume analysis,a marketing cost analysis will:

While it is a useful tool for financial analysis,the concept of Return on Assets Managed (ROAM)is not helpful when evaluating field sales managers.

Each sales rep in our firm has his own territory and sells our three product lines.Ten reps operate out of each of our seven branches.Which of the following is most likely to be a direct territorial expense?

A reason for using the contribution-margin approach in a marketing cost analysis is that:

Management can increase its return on investment by:

A(n)is a detailed study of the operating expense section of a company's profit and loss statement.

The most beneficial (to management)type of marketing cost analysis is to study these costs:

Suppose a marketing manager was conducting a marketing cost analysis.In doing so,she wanted to allocate activity costs to each of three sales offices.What would be the most appropriate approach for allocating personal selling expenses?

Which of the following is the best reason for using the contribution-margin approach in a marketing cost analysis by product line?

Regarding the relationship between marketing cost analysis and a company's accounting system:

One of the best arguments in favor of the full-cost approach to cost allocation is that:

In the contribution-margin approach in a marketing cost analysis,only the direct expenses are allocated to the marketing units being studied.

Regarding a marketing cost analysis,cost is a function of volume.

When a marketing cost analysis by territories shows a net loss for a territory,which of the following is management likely to do only as a last resort?

An argument in favor of the "full-cost" approach to cost allocation is:

A marketing cost analysis by territories often shows that the 80-20 principle is in effect.

The Field of Sales Force Management

Strategic Sales Force Management

Personal Selling Process

Sales Force Organization

Profiling and Recruiting Salespeople

Selecting and Hiring Applicants

Developing, Delivering, and Reinforcing a Sales Training Program

Motivating a Sales Force

Sales Force Compensation

Sales Force Quotas Expenses

Leadership of a Sales Force

Sales Forecasting and Developing Budgets

Sales Territories

Analysis of Sales Volume

Evaluating a Salespersons Performance

Ethical and Legal Responsibilities of Sales Managers

Filters