(for Expert_Researcher)

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Question 1

In performance evaluation by sales managers, the soft-spot principle holds that:

		a company should not get rid of a territory or product that is a soft spot.
		it is more useful to measure soft spots on a percentage basis rather than dollar volume.
		if a company does a good job in sales-volume analysis, it won't have soft spots.
		an executive reaps the largest possible gain by working with the weakest segments of the organization.

Question 2

In a marketing cost analysis, ledger expenses:

		are expense categories taken from the company's regular accounting system.
		are deducted from gross margins to get contributed margins.
		are derived by allocating activity costs to the various ledger categories.
		cannot be used in their present form.

Question 3

Suppose a marketing manager wishes to allocate activity costs to product lines. The first step in such an allocation process is:

		determine the total number of allocation units.
		select an appropriate allocation basis for distributing the cost of each activity among the product lines.
		estimate the net profit for each product line.
		determine total costs associated with each territorial sales office.

Question 4

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

		in the long run all costs are fixed.
		with a good accounting system, we can accurately allocate any expense.
		essentially, the whole purpose of a marketing cost analysis is to determine the net profitability of the marketing unit being studied.
		it is easy to establish defensible bases for allocating expenses.

Question 5

Most of the problems in cost allocation arise in connection with ___________ costs.

		direct
		indirect
		variable
		ledger

Question 6

Misdirected marketing effort occurs in many firms because:

		sales budgets are not prepared.
		management is profit-conscious, rather than being volume-conscious.
		management often lacks reliable standards for determining what should be spent on various marketing activities.
		marketing and accounting executives do not sufficiently align their efforts.

Question 7

ABC Company's total sales volume is $10 million, with a cost of goods sold equal to 50% of sales, and total indirect expenses of $2 million. The Eastern territory has sales volume that equals $1 million and direct expenses of $200,000. In a full-cost, marketing cost analysis that uses the proportion of sales volume to allocate indirect expenses, the net profit of the Eastern territory is:

		zero (no profit).
		$100,000.
		$300,000.
		$500,000.

Question 8

In the management process in a sales department:

		operational activities usually precede planning.
		planning tells us what really was done.
		planning and evaluation are interdependent activities.
		evaluation in this year's cycle is not related to any activities in next year's management process.

Question 9

When a marketing cost analysis by territories shows that a given territory is unprofitable, which of the following courses of action should be adopted as a last resort?

		Adjust territorial boundaries
		Use telephone selling instead of personal calls by salespeople in that district
		Adjust the promotional program for that district
		Abandon the territory entirely

Question 10

Generally speaking, accounting records are ____________; whereas a marketing cost analysis is ____________.

		for accountants; for salespeople
		highly accurate; a guesstimate
		to keep track of past financial information; for the purpose of future planning
		complex; simple

Question 11

What supporting points could be made over allocation of indirect marketing costs, by the proponents of each side, in the full-cost versus contribution-margin controversy ? Which of the two concepts do you advocate, and why?

Question 12

If a company made a territorial volume analysis and found some subpar territories, how might these facts affect the following activities relating to salespeople?

a) supervision

b) compensation

c) training