Question 1

If the sales revenue a customer generates exceeds the cost of goods sold,the customer is considered

Accepted Answer

A) Profitable 
B) Not profitable 
C) A "best customer" 
D) Cannot determine from the information given 
A) Profitable 
B) Not profitable 
C) A "best customer" 
D) Cannot determine from the information given

Question 2

Which of the following measures shows manager how many dollars a customer contributes to the company's bottom line?

Accepted Answer

A) Customer net profit 
B) Customer revenue margin 
C) Times revenue earned per customer 
D) Customer profit margin 
A) Customer net profit 
B) Customer revenue margin 
C) Times revenue earned per customer 
D) Customer profit margin

Question 3

The customer net profit shows managers how many dollars a customer contributes to the company's bottom line.

Accepted Answer

A) True 
 B)False

Question 4

In their book Killer Customers,Larry Selden and Geoffrey Colvin estimate what percentage of a company's customers generates approximately 120% of a company's profits?

Accepted Answer

A) 20% 
B) 40% 
C) 60% 
D) 80% 
A) 20% 
B) 40% 
C) 60% 
D) 80%

Question 5

Which of the following is $\textbf{   not      }$  a step in using activity-based costing to estimate customer profitability?

Accepted Answer

A) Calculate earnings per share 
B) Calculate activity cost pool rates 
C) Allocate selling costs to customers 
D) Calculate customer profitability 
A) Calculate earnings per share 
B) Calculate activity cost pool rates 
C) Allocate selling costs to customers 
D) Calculate customer profitability

Question 6

Assume you are a sales manager responsible for analyzing the profitability of the customers in your territory.You have gathered the following information on one of your customers:
   
a.Calculate the customer net profit.
b.Calculate the profit margin.

Accepted Answer

a.	$300,000 - $220,0

Question 7

When a manager drops an unprofitable customer,a company's total sales revenue and overall company profit will decrease.

Accepted Answer

A) True 
 B)False

Question 8

For each item below,identify whether the item applies to customer net profit or customer profit margin by marking an "X" in the appropriate column.

Accepted Answer

The answer of For each item below,identify whether the item...

Question 9

Revenues a customer generates less cost of goods associated with those revenues and the selling expenses allocated based on the customer-specific selling activities is referred to as

Accepted Answer

A) Customer revenue margin 
B) Times revenue earned per customer 
C) Customer profit margin 
D) Customer net profit 
A) Customer revenue margin 
B) Times revenue earned per customer 
C) Customer profit margin 
D) Customer net profit

Question 10

Which of the following is $\textbf{       not  }$  an administrative expense?

Accepted Answer

A) Factory supervisor's salary 
B) Depreciation on office equipment 
C) Payroll clerk's salary 
D) Janitorial supplies 
A) Factory supervisor's salary 
B) Depreciation on office equipment 
C) Payroll clerk's salary 
D) Janitorial supplies

Question 11

The formula for the customer profit margin is

Accepted Answer

A) Customer net profit divided by customer revenue 
B) Customer revenue divided by customer cost of goods sold 
C) Customer revenue less cost of goods sold less allocated selling expenses 
D) Customer profit margin less allocated selling and administrative expenses 
A) Customer net profit divided by customer revenue 
B) Customer revenue divided by customer cost of goods sold 
C) Customer revenue less cost of goods sold less allocated selling expenses 
D) Customer profit margin less allocated selling and administrative expenses

Question 12

Customer profit margin is calculated as customer net profit divided by customer gross profit.

Accepted Answer

A) True 
 B)False

Question 13

Before a manager decides to drop an unprofitable customer,the manager should evaluate all the implications of the action for the affected customer,for other customers,and for the company.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following would $\textbf{       not  }$  be a selling expense?

Accepted Answer

A) Rent on warehouse space 
B) Advertising on local TV station 
C) Indirect labor 
D) Depreciation on delivery truck 
A) Rent on warehouse space 
B) Advertising on local TV station 
C) Indirect labor 
D) Depreciation on delivery truck

Question 15

Two calculations that can be made to measure customer profitability are

Accepted Answer

A) Customer net profit and customer earnings per share 
B) Times revenue earned per customer and customer revenue margin 
C) Customer net profit and customer profit margin 
D) Customer revenue margin and customer profit margin 
A) Customer net profit and customer earnings per share 
B) Times revenue earned per customer and customer revenue margin 
C) Customer net profit and customer profit margin 
D) Customer revenue margin and customer profit margin

Question 16

Which of the following is $\textbf{   not       }$ a step in using activity-based costing to estimate customer profitability?

Accepted Answer

A) Develop activity cost pools 
B) Calculate equivalent 
C) Allocate selling costs to customers 
D) Calculate customer profitability 
A) Develop activity cost pools 
B) Calculate equivalent 
C) Allocate selling costs to customers 
D) Calculate customer profitability

Question 17

In their book Killer Customers,Larry Selden and Geoffrey Colvin estimate that the top 20% of a company's customers generate approximately 120% of the company's profits.

Accepted Answer

A) True 
 B)False

Question 18

Two calculations can be made to measure customer profitability: customer net profit and customer profit margin.
a.What is the formula for customer net profit?
b.What is the formula for customer profit margin?

Accepted Answer

a.Customer net profit = Custom

Question 19

The customer profit margin allows managers to compare customers based on how much each dollar of revenue they generate goes to the bottom line,regardless of the customers' absolute sales volume.

Accepted Answer

A) True 
 B)False

Question 20

If a customer $\textbf{        cannot }$  be returned to profitability and the customer is dropped,

Accepted Answer

A) The company's overall profit will increase. 
B) The company's revenue will decrease in the short-run. 
C) The managers will have more resources to serve profitable customers 
D) All of these ans choices are correct. 
A) The company's overall profit will increase. 
B) The company's revenue will decrease in the short-run. 
C) The managers will have more resources to serve profitable customers 
D) All of these ans choices are correct.

If the sales revenue a customer generates exceeds the cost of goods sold,the customer is considered

Which of the following measures shows manager how many dollars a customer contributes to the company's bottom line?

The customer net profit shows managers how many dollars a customer contributes to the company's bottom line.

In their book Killer Customers,Larry Selden and Geoffrey Colvin estimate what percentage of a company's customers generates approximately 120% of a company's profits?

Which of the following is $\textbf{ not }$ a step in using activity-based costing to estimate customer profitability?

Assume you are a sales manager responsible for analyzing the profitability of the customers in your territory.You have gathered the following information on one of your customers: a.Calculate the customer net profit. b.Calculate the profit margin.

When a manager drops an unprofitable customer,a company's total sales revenue and overall company profit will decrease.

For each item below,identify whether the item applies to customer net profit or customer profit margin by marking an "X" in the appropriate column.

Revenues a customer generates less cost of goods associated with those revenues and the selling expenses allocated based on the customer-specific selling activities is referred to as

Which of the following is $\textbf{ not }$ an administrative expense?

The formula for the customer profit margin is

Customer profit margin is calculated as customer net profit divided by customer gross profit.

Before a manager decides to drop an unprofitable customer,the manager should evaluate all the implications of the action for the affected customer,for other customers,and for the company.

Which of the following would $\textbf{ not }$ be a selling expense?

Two calculations that can be made to measure customer profitability are

Which of the following is $\textbf{ not }$ a step in using activity-based costing to estimate customer profitability?

In their book Killer Customers,Larry Selden and Geoffrey Colvin estimate that the top 20% of a company's customers generate approximately 120% of the company's profits.

Two calculations can be made to measure customer profitability: customer net profit and customer profit margin. a.What is the formula for customer net profit? b.What is the formula for customer profit margin?

The customer profit margin allows managers to compare customers based on how much each dollar of revenue they generate goes to the bottom line,regardless of the customers' absolute sales volume.

If a customer $\textbf{ cannot }$ be returned to profitability and the customer is dropped,

Accounting As a Tool for Management

Cost Behavior and Cost Estimation Summary of Questions by Objectives and Blooms Taxonomy

Cost-Volume-Profit Analysis and Pricing Decisions

Product Costs and Job Order Costing

Planning and Forecasting

Performance Evaluation: Variance Analysis

Activity-Based Costing and Activity Based Management

Using Accounting Information to Make Managerial Decisions

Capital Budgeting

Decentralizing and Performance Evaluation

Performance Evaluation Revisited: a Balanced Approach

Financial Statement Analysis

Statement of Cash Flows

Topic Focus: Process Costing

Topic Focus Variable and Absorption Costing

Topic Focus Standard Costing Systems

Filters

Exam 17: Topic Focus Customer Profitability

If the sales revenue a customer generates exceeds the cost of goods sold,the customer is considered

Which of the following measures shows manager how many dollars a customer contributes to the company's bottom line?

The customer net profit shows managers how many dollars a customer contributes to the company's bottom line.

In their book Killer Customers,Larry Selden and Geoffrey Colvin estimate what percentage of a company's customers generates approximately 120% of a company's profits?

Which of the following is not \textbf{ not } not a step in using activity-based costing to estimate customer profitability?

Assume you are a sales manager responsible for analyzing the profitability of the customers in your territory.You have gathered the following information on one of your customers: a.Calculate the customer net profit. b.Calculate the profit margin.

When a manager drops an unprofitable customer,a company's total sales revenue and overall company profit will decrease.

For each item below,identify whether the item applies to customer net profit or customer profit margin by marking an "X" in the appropriate column.

Revenues a customer generates less cost of goods associated with those revenues and the selling expenses allocated based on the customer-specific selling activities is referred to as

Which of the following is not \textbf{ not } not an administrative expense?

The formula for the customer profit margin is

Customer profit margin is calculated as customer net profit divided by customer gross profit.

Before a manager decides to drop an unprofitable customer,the manager should evaluate all the implications of the action for the affected customer,for other customers,and for the company.

Which of the following would not \textbf{ not } not be a selling expense?

Two calculations that can be made to measure customer profitability are

Which of the following is not \textbf{ not } not a step in using activity-based costing to estimate customer profitability?

In their book Killer Customers,Larry Selden and Geoffrey Colvin estimate that the top 20% of a company's customers generate approximately 120% of the company's profits.

Two calculations can be made to measure customer profitability: customer net profit and customer profit margin. a.What is the formula for customer net profit? b.What is the formula for customer profit margin?

The customer profit margin allows managers to compare customers based on how much each dollar of revenue they generate goes to the bottom line,regardless of the customers' absolute sales volume.

If a customer cannot \textbf{ cannot } cannot be returned to profitability and the customer is dropped,

Accounting As a Tool for Management

Cost Behavior and Cost Estimation Summary of Questions by Objectives and Blooms Taxonomy

Cost-Volume-Profit Analysis and Pricing Decisions

Product Costs and Job Order Costing

Planning and Forecasting

Performance Evaluation: Variance Analysis

Activity-Based Costing and Activity Based Management

Using Accounting Information to Make Managerial Decisions

Capital Budgeting

Decentralizing and Performance Evaluation

Performance Evaluation Revisited: a Balanced Approach

Financial Statement Analysis

Statement of Cash Flows

Topic Focus: Process Costing

Topic Focus Variable and Absorption Costing

Topic Focus Standard Costing Systems

Filters

Which of the following is $\textbf{ not }$ a step in using activity-based costing to estimate customer profitability?

Which of the following is $\textbf{ not }$ an administrative expense?

Which of the following would $\textbf{ not }$ be a selling expense?

Which of the following is $\textbf{ not }$ a step in using activity-based costing to estimate customer profitability?

If a customer $\textbf{ cannot }$ be returned to profitability and the customer is dropped,