Question 1

The first step in conducting a market profitability analysis is to specify the purpose of the cost study and determine functional cost centers.

Accepted Answer

A) True 
 B)False

Question 2

What is the major benefit of marketing cost analysis?

Accepted Answer

It provides marketing managers with the ...

Question 3

__________ reflect the other costs incurred in operating a business, such as advertising.

Accepted Answer

A)   Indirect costs
B)   Expenses
C)   General expenses
D)   Indirect expenses
E)   CostsF) B) and D)
G) A) and C)

Question 4

In the contribution margin approach, a ___________ margin is calculated while in a full-cost approach a ________ margin is calculated.

Accepted Answer

A)   Gross; contribution
B)   Singular; sequential
C)   Contribution; gross
D)   Minimal; Maximum
E)   Below-cost; above costF) A) and B)
G) A) and D)

Question 5

Which of the following statements about the general procedure used to conduct a cost or profitability analysis is true?

Accepted Answer

A)   The first step in conducting a cost or profitability analysis is to spread the natural account costs to the appropriate functional cost centers
B)   Before determining the purpose of the cost analysis, natural cost centers must be identified
C)   Before determining the purpose of the profitability analysis, natural account costs must be allocated to functional cost centers
D)   Good profitability analyses require that the various costs be partitioned into direct and indirect expenses so the proper aggregations can be made
E)   Natural accounts are the only way that costs can be classified for either a profitability or cost analysisF) A) and E)
G) A) and B)

Question 6

Which of the following is the best example of a functional account?

Accepted Answer

A)   Order processing
B)   Office supplies
C)   Rent
D)   Electricity
E)   Raw materialsF) A) and B)
G) A) and C)

Question 7

Full-cost approach advocates argue that:

Accepted Answer

A)   Many indirect costs can be assigned based on a demonstrated cost relationship
B)   Each unit territory, customer, or product)  should bear only the direct costs which it incurred
C)   Prorating indirect costs is unnecessary and illogical
D)   Companies that use a contribution approach cannot uncover problem areas products, customers, or territories) 
E)   The terms costs and expenses should be used interchangeablyF) A) and C)
G) A) and B)

Question 8

Olivia wants to better allocate her sales force. She gathers sales and cost data and studies the ________________ relationships.

Accepted Answer

A)   Sales/revenue
B)   Output/input
C)   Cost/input
D)   ABC/ROAM
E)   All of the aboveF) C) and E)
G) D) and E)

Question 9

Why should costs not be allocated based on sales volume?

Accepted Answer

Allocating costs based on sale...

Question 10

What is the difference between natural and functional accounts?

Accepted Answer

Natural accounts bear the name...

Question 11

It is relatively simple to conduct a cost or profitability analysis.

Accepted Answer

A) True 
 B)False

Question 12

A company that manufactures specialized database-gathering software for retailers, physicians, lawyers, and anyone else that needs a database wants to do a marketing cost analysis. If it uses product as its object of measurement, then a particular sales representative's compensation is an example of a(n) :

Accepted Answer

A)   General expense and direct cost
B)   Indirect cost and general expense
C)   Direct cost and specific expense
D)   Specific expense and indirect expense
E)   None of the AboveF) C) and D)
G) B) and E)

Question 13

How should advertising costs be functionally allocated?

Accepted Answer

Within product groups, advertising costs...

Question 14

All of the following are disadvantages associated with a marketing cost analysis EXCEPT:

Accepted Answer

A)   The high cost of the data needed for the analysis
B)   The difficulty associated with determining allocation bases
C)   The amount of detail information needed for an analysis
D)   The lack of tangible profit as a result of such an analysis
E)   The need for a sophisticated computer system to perform such an analysisF) A) and E)
G) A) and D)

Question 15

Contribution margin advocates argue that costs should be arbitrarily allocated.

Accepted Answer

A) True 
 B)False

Question 16

Companies are more likely to conduct _______ analysis than profitability analysis.

Accepted Answer

A)   Accounting
B)   Sales
C)   Headquarters
D)   Customer relationship management
E)   ProductionF) A) and E)
G) None of the above

Question 17

A key factor in determining the overall profitability of each customer is:

Accepted Answer

A)   The cost of goods produced
B)   The pricing authority of salespeople
C)   Competitiveness of the derived demand
D)   Returns on assets managed
E)   Full-cost accountingF) A) and E)
G) None of the above

Question 18

Delivery cost for plastic polymer film to shrink wrap yo-yos is an example of a direct cost.

Accepted Answer

A) True 
 B)False

Question 19

Tyrone is attempting to measure the long-term value or profitability of his customers. Tyrone is measuring:

Accepted Answer

A)   Sales per customer per quarter
B)   Current operating profit minus direct costs
C)   Gross revenue minus net revenue
D)   Lifetime value of the customer
E)   Relationship revenue minus overhead costsF) B) and C)
G) None of the above

Question 20

What is the difference between a direct cost and an indirect cost?

Accepted Answer

A direct cost can be specifica...

Exam 12: Cost Analysis

The first step in conducting a market profitability analysis is to specify the purpose of the cost study and determine functional cost centers.

Correct Answer
verified

Companies are more likely to conduct _______ analysis than profitability analysis.

Correct Answer
verified

All of the following are disadvantages associated with a marketing cost analysis EXCEPT:

Correct Answer
verified

A key factor in determining the overall profitability of each customer is:

Correct Answer
verified

What is the difference between natural and functional accounts?

Correct Answer
verified
Natural accounts bear the name...
View Answer

Which of the following is the best example of a functional account?

Correct Answer
verified

Which of the following statements about the general procedure used to conduct a cost or profitability analysis is true?

Correct Answer
verified

Olivia wants to better allocate her sales force. She gathers sales and cost data and studies the ________________ relationships.

Correct Answer
verified

Full-cost approach advocates argue that:

Correct Answer
verified

Why should costs not be allocated based on sales volume?

Correct Answer
verified
Allocating costs based on sale...
View Answer

Delivery cost for plastic polymer film to shrink wrap yo-yos is an example of a direct cost.

Correct Answer
verified

Tyrone is attempting to measure the long-term value or profitability of his customers. Tyrone is measuring:

Correct Answer
verified

How should advertising costs be functionally allocated?

Correct Answer
verified
Within product groups, advertising costs...
View Answer

What is the difference between a direct cost and an indirect cost?

Correct Answer
verified
A direct cost can be specifica...
View Answer

__________ reflect the other costs incurred in operating a business, such as advertising.

Correct Answer
verified

Contribution margin advocates argue that costs should be arbitrarily allocated.

Correct Answer
verified

In the contribution margin approach, a ___ margin is calculated while in a full-cost approach a margin is calculated.

Correct Answer
verified

What is the major benefit of marketing cost analysis?

Correct Answer
verified
It provides marketing managers with the ...
View Answer

Correct Answer
verified

It is relatively simple to conduct a cost or profitability analysis.

Correct Answer
verified

Exam 12: Cost Analysis

The first step in conducting a market profitability analysis is to specify the purpose of the cost study and determine functional cost centers.

Correct AnswerverifiedShow Answer

Companies are more likely to conduct _______ analysis than profitability analysis.

Correct AnswerverifiedShow Answer

All of the following are disadvantages associated with a marketing cost analysis EXCEPT:

Correct AnswerverifiedShow Answer

A key factor in determining the overall profitability of each customer is:

Correct AnswerverifiedShow Answer

What is the difference between natural and functional accounts?

Correct AnswerverifiedNatural accounts bear the name...View AnswerShow Answer

Which of the following is the best example of a functional account?

Correct AnswerverifiedShow Answer

Which of the following statements about the general procedure used to conduct a cost or profitability analysis is true?

Correct AnswerverifiedShow Answer

Olivia wants to better allocate her sales force. She gathers sales and cost data and studies the ________________ relationships.

Correct AnswerverifiedShow Answer

Full-cost approach advocates argue that:

Correct AnswerverifiedShow Answer

Why should costs not be allocated based on sales volume?

Correct AnswerverifiedAllocating costs based on sale...View AnswerShow Answer

Delivery cost for plastic polymer film to shrink wrap yo-yos is an example of a direct cost.

Correct AnswerverifiedShow Answer

Tyrone is attempting to measure the long-term value or profitability of his customers. Tyrone is measuring:

Correct AnswerverifiedShow Answer

How should advertising costs be functionally allocated?

Correct AnswerverifiedWithin product groups, advertising costs...View AnswerShow Answer

What is the difference between a direct cost and an indirect cost?

Correct AnswerverifiedA direct cost can be specifica...View AnswerShow Answer

__________ reflect the other costs incurred in operating a business, such as advertising.

Correct AnswerverifiedShow Answer

Contribution margin advocates argue that costs should be arbitrarily allocated.

Correct AnswerverifiedShow Answer

In the contribution margin approach, a ___________ margin is calculated while in a full-cost approach a ________ margin is calculated.

Correct AnswerverifiedShow Answer

What is the major benefit of marketing cost analysis?

Correct AnswerverifiedIt provides marketing managers with the ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

It is relatively simple to conduct a cost or profitability analysis.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Natural accounts bear the name...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Allocating costs based on sale...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Within product groups, advertising costs...
View Answer

Correct Answer
verified
A direct cost can be specifica...
View Answer

Correct Answer
verified

Correct Answer
verified

In the contribution margin approach, a ___ margin is calculated while in a full-cost approach a margin is calculated.

Correct Answer
verified

Correct Answer
verified
It provides marketing managers with the ...
View Answer

Correct Answer
verified

Correct Answer
verified