Question 1

The stockturn rate shows how rapidly a firm's inventory is moving.

Accepted Answer

A) True 
 B)False  True

Question 2

In the "jury of executive opinion" method of forecasting:

Accepted Answer

A)  the main advantage is that its results are always very good. 
B)  each executive projects future trends, but does no extending of the past. 
C)  forecasters develop a combination of factors. 
D)  the combined opinions of experienced executives are used to reach a consensus. 
E)  none of the above. 
A)  the main advantage is that its results are always very good. 
B)  each executive projects future trends, but does no extending of the past. 
C)  forecasters develop a combination of factors. 
D)  the combined opinions of experienced executives are used to reach a consensus. 
E)  none of the above. D

Question 3

Return on investment and return on assets are both measures of how effectively a firm uses its resources.

Accepted Answer

A) True 
 B)False  True

Question 4

A major limitation of the factor method is that it does not allow several factors to be used together.

Accepted Answer

A) True 
 B)False

Question 5

Purchase discounts should be subtracted from the original invoice cost of purchases to get the net cost of purchases.

Accepted Answer

A) True 
 B)False

Question 6

Given the following information, calculate the firm's NET PROFIT (or LOSS).

Accepted Answer

A)  $85,000 
B)  $100,000 
C)  $50,000 
D)  $160,000 
E)  a loss of $200,000 
A)  $85,000 
B)  $100,000 
C)  $50,000 
D)  $160,000 
E)  a loss of $200,000

Question 7

A 33 1/3 percent markup on selling price equals a 50 percent markup on cost.

Accepted Answer

A) True 
 B)False

Question 8

A farm supply store starting with a $40,000 inventory at cost expects to sell $400,000 (cost of sales) of merchandise in the coming year. It plans to turn over its stock 10 times during the year. How much merchandise must the shop purchase during the year?

Accepted Answer

A)  $200,000 
B)  $400,000 
C)  $420,000 
D)  $440,000 
E)  None of the above. 
A)  $200,000 
B)  $400,000 
C)  $420,000 
D)  $440,000 
E)  None of the above.

Question 9

SALES & MARKETING MANAGEMENT'S "Buying Power Index" (BPI) reflects each geographic market's share of total U.S.:

Accepted Answer

A)  population. 
B)  income. 
C)  retail sales. 
D)  All of the above. 
E)  Only A and C above. 
A)  population. 
B)  income. 
C)  retail sales. 
D)  All of the above. 
E)  Only A and C above.

Question 10

Regarding operating statements:

Accepted Answer

A)  gross sales are the actual sales dollars the company will receive. 
B)  net sales minus expenses equals the cost of sales. 
C)  "gross sales" minus expenses equals the cost of sales. 
D)  gross margin equals expenses plus net profit. 
E)  gross margin is the money left after all expenses are subtracted from net sales. 
A)  gross sales are the actual sales dollars the company will receive. 
B)  net sales minus expenses equals the cost of sales. 
C)  "gross sales" minus expenses equals the cost of sales. 
D)  gross margin equals expenses plus net profit. 
E)  gross margin is the money left after all expenses are subtracted from net sales.

Question 11

"Expenses" (on an operating statement) usually include the cost of sales--both purchased and produced.

Accepted Answer

A) True 
 B)False

Question 12

Based on the information in Table B-1, net sales are:

Accepted Answer

A)  $560,000. 
B)  $530,000. 
C)  $650,000. 
D)  $610,000. 
E)  $600,000. 
A)  $560,000. 
B)  $530,000. 
C)  $650,000. 
D)  $610,000. 
E)  $600,000.

Question 13

Which of the following would NOT be shown on a firm's "balance sheet"?

Accepted Answer

A)  Liabilities 
B)  Net worth 
C)  Assets 
D)  Net sales 
E)  All of the above would be on a firm's balance sheet. 
A)  Liabilities 
B)  Net worth 
C)  Assets 
D)  Net sales 
E)  All of the above would be on a firm's balance sheet.

Question 14

When a firm subtracts its cost of sales from its net sales, the amount left over is called:

Accepted Answer

A)  gross margin. 
B)  return on assets. 
C)  net profit. 
D)  expenses. 
E)  gross sales. 
A)  gross margin. 
B)  return on assets. 
C)  net profit. 
D)  expenses. 
E)  gross sales.

Question 15

A good marketing manager knows that:

Accepted Answer

A)  market potential is an estimate of how much a firm can hope to sell to a particular market segment. 
B)  sales forecasts should be developed BEFORE marketing strategies are planned. 
C)  a firm's sales forecast probably will be less than the estimated market potential. 
D)  sales forecasts are estimates of what a whole market segment might buy. 
E)  All of the above are true. 
A)  market potential is an estimate of how much a firm can hope to sell to a particular market segment. 
B)  sales forecasts should be developed BEFORE marketing strategies are planned. 
C)  a firm's sales forecast probably will be less than the estimated market potential. 
D)  sales forecasts are estimates of what a whole market segment might buy. 
E)  All of the above are true.

Question 16

Regarding sales forecasting:

Accepted Answer

A)  marketing managers usually develop their own national income and industry forecasts. 
B)  trend extension cannot be used when past sales have varied. 
C)  the final step should be to develop an industry sales forecast. 
D)  trend extension assumes that past conditions will continue unchanged into the future. 
E)  only one forecasting method should be used because different techniques give different forecasts. 
A)  marketing managers usually develop their own national income and industry forecasts. 
B)  trend extension cannot be used when past sales have varied. 
C)  the final step should be to develop an industry sales forecast. 
D)  trend extension assumes that past conditions will continue unchanged into the future. 
E)  only one forecasting method should be used because different techniques give different forecasts.

Question 17

Monthly operating statements might be used to uncover unfavorable trends in sales, costs, and profit.

Accepted Answer

A) True 
 B)False

Question 18

A retailer has estimated that her store has a market potential of about $3 million for the coming year. From this information, we know that:

Accepted Answer

A)  the owner has not yet planned her marketing strategy for the coming year. 
B)  the store will sell about $3 million of goods and services during the coming year. 
C)  the store's sales forecast is probably LESS than $3 million. 
D)  if the store maintains its present 20 percent market share, its competitors' sales should total about $15 million. 
E)  Both B and C are true. 
A)  the owner has not yet planned her marketing strategy for the coming year. 
B)  the store will sell about $3 million of goods and services during the coming year. 
C)  the store's sales forecast is probably LESS than $3 million. 
D)  if the store maintains its present 20 percent market share, its competitors' sales should total about $15 million. 
E)  Both B and C are true.

Question 19

Based on the information in Table B-2, and assuming a 50 percent tax on net profit, the return on investment (ROI) is:

Accepted Answer

A)  10%. 
B)  20%. 
C)  15%. 
D)  5%. 
E)  the return is negative because the business lost money. 
A)  10%. 
B)  20%. 
C)  15%. 
D)  5%. 
E)  the return is negative because the business lost money.

Question 20

"Cost of sales" equals the total value of all the products purchased during an operating period plus freight in.

Accepted Answer

A) True 
 B)False

Exam 23: Marketing Arithmetic

The stockturn rate shows how rapidly a firm's inventory is moving.

In the "jury of executive opinion" method of forecasting:

Return on investment and return on assets are both measures of how effectively a firm uses its resources.

A major limitation of the factor method is that it does not allow several factors to be used together.

Purchase discounts should be subtracted from the original invoice cost of purchases to get the net cost of purchases.

Given the following information, calculate the firm's NET PROFIT (or LOSS).

A 33 1/3 percent markup on selling price equals a 50 percent markup on cost.

A farm supply store starting with a $40,000 inventory at cost expects to sell $400,000 (cost of sales) of merchandise in the coming year. It plans to turn over its stock 10 times during the year. How much merchandise must the shop purchase during the year?

SALES & MARKETING MANAGEMENT'S "Buying Power Index" (BPI) reflects each geographic market's share of total U.S.:

Regarding operating statements:

"Expenses" (on an operating statement) usually include the cost of sales--both purchased and produced.

Based on the information in Table B-1, net sales are:

Which of the following would NOT be shown on a firm's "balance sheet"?

When a firm subtracts its cost of sales from its net sales, the amount left over is called:

A good marketing manager knows that:

Regarding sales forecasting:

Monthly operating statements might be used to uncover unfavorable trends in sales, costs, and profit.

A retailer has estimated that her store has a market potential of about $3 million for the coming year. From this information, we know that:

Based on the information in Table B-2, and assuming a 50 percent tax on net profit, the return on investment (ROI) is:

"Cost of sales" equals the total value of all the products purchased during an operating period plus freight in.

Marketings Value to Consumers, Firms, and Society

Marketing Strategy Planning

Evaluating Opportunities in the Changing Marketing Environment

Focusing Marketing Strategy With Segmentation and Positioning

Demographic Dimensions of Global Consumer Markets

Final Consumers and Their Buying Behavior

Business and Organizational Customers and Their Buying Behavior

Improving Decisions With Marketing Information

Elements of Product Planning for Goods and Services

Product Management and New-Product Development

Place and Development of Channel Systems

Distribution Customer Service and Logistics

Retailers,wholesalers,and Their Strategy Planning

Promotion-Introduction to Integrated Marketing Communications

Personal Selling and Customer Service

Advertising, Publicity, and Sales Promotion

Pricing Objectives and Policies

Price Setting in the Business World

Implementing and Controlling Marketing Plans: Evolution and Revolution

Managing Marketings Link With Other Functional Areas

Ethical Marketing in a Consumer-Oriented World: Appraisal and Challenges

Economics Fundamentals

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