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Activity based questions




Question;MULTIPLE CHOICE QUESTIONS93. Using cost;analysis to analyze the money being spent by a firm is analogous to using;to analyze the money coming into the firm.;sales;analysis;traditional;accounting reports;performance;analysis;the;iceberg principle;TQM;methods;94. The text's;full-cost approach" to marketing cost analysis;looks;only at each customer or product's "contribution margin.;allocates;all costs to products, customers, or other categories.;looks;only at those costs which are directly related to particular alternatives.;is;misleading and should be avoided.;All of;the above.;95. The;contribution-margin approach" to marketing cost analysis;considers;only those costs which are directly related to particular alternatives.;is;especially useful for estimating the long-run profit of a proposed strategy.;allocates;variable costs which are hard to measure to overhead.;is;especially useful for determining if there should be more controls on fixed;costs.;All of;the above.;96. The;contribution margin approach" to marketing cost analysis;allocates;all costs to products or customers.;should;always be used instead of the full-cost approach--so that fixed costs are fully;considered.;focuses;management's attention on variable costs rather than total costs.;assumes;that all costs must be allocated.;None of;the above.;97. Regarding;marketing cost analysis;the;full-cost approach usually should be used as there are almost always some fixed;costs to be allocated.;the;contribution-margin approach focuses attention on variable costs.;fixed;costs should be allocated according to the contribution-margin approach.;the;action implications will be the same whether the full-cost or;contribution-margin approach is used.;the;contribution-margin approach provides the most complete allocation of total;expenses.;98. The main;difference between the full-cost approach and the contribution-margin approach;to marketing cost analysis is;The;contribution-margin approach uses both mechanical and logical reasoning to;allocate marketing costs.;The;full-cost approach allocates all costs--even fixed costs--to products;customers, or other categories.;The;contribution-margin approach allocates all costs to show how profitable various;customers are.;The;full-cost approach focuses on variable costs rather than total costs.;99. With the;contribution-margin approach" to marketing cost analysis;all;costs are allocated to products, customers, or other categories.;fixed;costs are allocated based on the profit contribution to the firm.;variable;costs are treated as common costs.;common;costs which are hard to allocate are ignored.;None of;the above is true.;100. Lori;Winters, a regional sales manager, is interested in the profitability of the;different sales reps in her region. She has used a variety of different;approaches for allocating fixed sales expenses to the different sales reps, but;she reaches very different conclusions depending on which allocation approach;is used. In this case, it would be wise for Ms. Winters to supplement her other;analyses with an analysis based on;the;contribution-margin approach.;the;full-cost approach.;the;marketing audit approach.;none of;the above.;all of;the above.;101. Regarding;the "contribution-margin approach" to marketing cost analysis, which;of the following statements is TRUE?;The;total net profit obtained with this approach is different from that obtained;using the "full-cost approach.;It is;concerned with the amount contributed by a product or customer toward covering;variable costs--after fixed costs have been covered.;This;approach stresses the need for evaluating fixed costs.;This;approach may suggest a different action than the "full-cost;approach.;All of;the above are true.;102. When the;full-cost approach" to marketing cost analysis is used, allocating fixed;costs on the basis of sales;may;make low-volume customers appear more profitable than they are.;increases;each customer's contribution margin.;decreases;the profitability of the whole business.;makes;large-volume customers appear more profitable that they are.;increases;the profitability of the whole business.;103. If one were;using the "full-cost" approach to marketing cost analysis, then;allocating fixed costs on the basis of sales volume would;make;some customers appear more profitable than they actually are.;not be;done--because only variable costs would be analyzed.;make;some products appear less profitable than they actually are.;decrease;the profitability of the whole business.;Both A;and C are true statements.;104. Which of;the following would be the BEST reason to use the "full-cost;approach" when comparing the performance of several product managers?;Unlike;the "contribution-margin approach," it charges managers only for the;expenses which are directly related to their operations.;This;approach is required by Federal tax laws.;It;charges each product manager only for those expenses which he controls.;It;allows management to consider only the variable costs related to different;products.;It;makes each manager bear a share of the overhead expenses which were made for;everyone's benefit.;105. A company;produces three product lines and a different marketing manager is responsible;for each line. Most marketing expenses are specific to each line, but a common;sales force sells all three lines. Sales reps are paid by commission, with a;different commission for each product line. In this case, in a marketing cost;analysis;the;contribution-margin approach would probably divide personal selling expense;based on commission expense for each product line.;a;full-cost approach would ignore commission expense since it is not a fixed;cost.;sales;commissions are a variable expense and would not be considered in the;contribution-margin approach.;the;full-cost approach would be easier to do if all sales reps were paid a straight;salary.;None of;the above is true.;106. When;deciding how to evaluate costs, a marketing manager should realize that;the;best method for dealing with fixed costs depends on the objectives of the analysis.;according;to the iceberg principle too much detail in cost analysis obscures the big;problems by calling attention to the superficial problems.;the;full cost approach is misleading and should not be used.;the;contribution-margin approach ignores necessary fixed costs and should not be;used.;None of;the above.;107. Which of;the following statements about the contribution-margin approach is FALSE?;It is;concerned with the amount contributed by an item or group of items toward;covering fixed costs.;This;approach suggests that it is not necessary to consider all costs in all;situations.;Top;management almost always finds this approach more useful than full-cost;analysis.;This;approach frequently leads to data which suggest a different decision than might;be indicated by the full-cost approach.;It;focuses on controllable costs--rather than on total costs.;108. A;systematic, critical, and unbiased review and appraisal of the basic objectives;and policies of the marketing function--and of the organization, methods;procedures, and people employed to implement the policies--is called a;MIS;report.;marketing;audit.;management;review.;marketing;information system.;marketing;analysis survey.;109. A marketing;audit should help determine if;current;marketing strategies are good ones.;the;company's marketing objectives are reasonable.;implementation;of a marketing program was effective.;All of;the above.;None of;the above.;110. A marketing;audit is;an;evaluation of day-to-day marketing operations.;an;analysis of the profitability of all profit centers.;a;review of a marketing program during a crisis.;a;detailed look by a CPA at how the company's marketing costs are allocated.;a;systematic, critical, and unbiased review and appraisal of the objectives and;policies of the marketing function.;111. A;marketing audit" should;be done;by someone inside the finance department.;be;conducted whenever a crisis arises.;be;conducted by the person most familiar with each of the firm's marketing plans.;evaluate;a company's whole marketing program on a regular basis.;All of;the above.;112. Which of;the following statements about a "marketing audit" is true?;A;marketing audit should be conducted only when some crisis arises.;It;probably should be conducted by someone inside the marketing department who is;familiar with the whole program.;A;marketing audit should evaluate the company's whole marketing program--not just;some parts of it.;A;marketing audit should be handled by the specialist most familiar with each of;the marketing plans in the program.;All of;the above are true statements.


Paper#44976 | Written in 18-Jul-2015

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