Question 1

As a sales rep for Healthtex, Linda plans her activities for the next week; she establishes a fixed day and time to visit each customer's place of business. She is engaged in the process of:
A) account grouping.
B) routing.
C) customer allocation.
D) accounts mapping.
E) scheduling.

Accepted Answer

Linda is scheduling her activities for the next week.

Question 2

Meredith Jacoby sells floral supplies. Her annual sales equal $450,000. Her total fixed costs annually equal $75,000.The cost of goods sold annually is $335,000. Calculate her gross profit percentage.
A) 11.9%
B) 20.3%
C) 25.6%
D) 34.3%
E) Cannot be determined from information given

Accepted Answer

Gross profit = Sales - Cost of Goods Sold
Gross profit = $450,000 - $335,000 = $115,000

Gross profit percentage = (Gross profit / Sales) x 100
Gross profit percentage = ($115,000 / $450,000) x 100 = 25.6%

Question 3

The J&L Grocery Distribution Company characterizes its customers according to their yearly sales potential and whether the account is a retailer, wholesaler, or government agency. This approach to segmentation is called:
A) undifferentiated selling.
B) double-positioning.
C) multivariable account segmentation.
D) parallel account segregation.
E) total territory management.

Accepted Answer

The approach of segmenting customers according to both their yearly sales potential and their type of account (retailer, wholesaler, or government agency) is known as multivariable account segmentation. This approach allows for the company to tailor their marketing and sales strategies to each specific segment, as they will have different needs and expectations based on their account type and sales potential.

Question 4

Based on the following data, calculate the breakeven point in dollars: Sales = $400,000
Gross Profit = $100,000
Transportation = $8,000
Cost of Goods Sold = $280,000
Expenses = $10,000
Salary = $40,000
A) $96,667
B) $133,333
C) $166,000
D) $232,000
E) Cannot be calculated with the information provided

Accepted Answer

Gross profit percentage = Gross profit/sales = $100,000/$400,000 = 25%
BEP = Fixed costs/gross profit % = $58,000/25% = $232,000

Question 5

Ryan Hester sells building supplies. His annual sales equal $450,000. His total fixed costs annually equal $75,000. The cost of goods sold annually is $335,000. Ryan's break-even point in terms of total sales is approximately:
A) $198,000
B) $218,600
C) $224,000
D) $293.000
E) $315,200

Accepted Answer

Gross profit = annual sales - cost of goods sold = $450,000 - $335,000 = $115,000
Gross profit percentage = Gross profit/sales = $115,000/$450,000 = 25.6%
BEP = Fixed costs/gross profit % = $75,000/25.6% = $292,968.75

Question 6

Mario Jimenez sells electrical supplies. His annual sales equal $450,000. His total fixed costs annually equal $75,000. The cost of goods sold annually is $335,000. Mario works an average of 240 days a year and 8 hours each day. Mario makes an average of five sales calls per day. Mario's break-even volume per hour is approximately:
A) $119.00
B) $153.00
C) $171.00
D) $256.00
E) $392.00

Accepted Answer

To find the break-even volume per hour, we need to use the formula:
Break-even volume per hour = (Fixed costs per day + Variable costs per day) / Hours worked per day

Fixed costs per day = Total fixed costs annually / Number of working days per year
Fixed costs per day = $75,000 / 240 = $312.50

Variable costs per day = Cost of goods sold annually / Number of working days per year
Variable costs per day = $335,000 / 240 = $1,395.83

Total costs per day = Fixed costs per day + Variable costs per day
Total costs per day = $312.50 + $1,395.83 = $1,708.33

Now to find the break-even volume per hour:
Break-even volume per hour = Total costs per day / Hours worked per day
Break-even volume per hour = $1,708.33 / (240 * 8) = $0.89 per minute

To convert per minute to per hour, we multiply by 60:
Break-even volume per hour = $0.89 * 60 = $53.40

However, we need to find the break-even volume per hour for five sales calls per day. If we assume that each sales call takes an hour, then the break-even volume per hour for each sales call would be:
Break-even volume per sales call = $53.40 / 5 = $10.68

If we assume that each sales call takes half an hour, then the break-even volume per hour for each sales call would be:
Break-even volume per sales call = $53.40 / 10 = $5.34

Therefore, the closest answer is B) $153.00, which is $10.68 per sales call multiplied by 14 sales calls per day (240 working days multiplied by 5 sales calls per day).

Question 7

"To increase the product assortment purchased by current customers by two percent during the next three months," is an example of a(n):
A) market quota.
B) derived demand.
C) account objective.
D) future product quotient.
E) net product forecast.

Accepted Answer

This statement is an example of an account objective, which is a specific goal set for a particular customer account, in this case, to increase their product assortment purchased by two percent over the next three months. A market quota refers to a company's overall sales target. Derived demand refers to the demand for goods or services that arises as a result of demand for related goods or services. "Future product quotient" and "net product forecast" are not recognized industry terms.

Question 8

James Lambert is an assistant territory sales manager at Cellcom, a leading wireless service provider in Europe. James manages the salespeople in a small city in France. There are many players in the wireless service provider market, and it is becoming increasingly difficult to position the company as unique. What can James do to position Cellcom as a unique company, when compared to its competitors?
A) Reduce the call rates by half.
B) Increase the mass media advertising of Cellcom.
C) Instruct salespeople to spend more time on each sales call.
D) Ask salespeople to discuss the weakness of competition in every sales call.
E) Substantially reduce the salespeople's visits to the small accounts and increase the visits to key accounts.

Accepted Answer

James should strive to create the image that Cellcom is uniquely better than the competition. One way to accomplish this is to spend more time on each sales call and to make more total sales calls during the year, thus providing a problem-solving approach to servicing accounts.

Question 9

According to the suggestions in the text, daily planning by the salesperson would be LEAST likely to include:
A) determination of the time to contact the customer.
B) analysis of territorial gains and losses.
C) selection of the next day's prospects.
D) organization of facts and figures.
E) preparation of sales presentation materials.

Accepted Answer

Although it is important for a salesperson to analyze their territory over time, it is not a daily planning task. The other options, such as determining the time to contact customers, selecting prospects, organizing information, and preparing presentation materials, are all tasks that a salesperson would typically do on a daily basis.

Question 10

Which of the following can be used to calculate the costs and revenues of sales territories?
A) ELMS system
B) Break-even analysis
C) Multivariate territorial analysis
D) Keystoning
E) SWOT analysis

Accepted Answer

The break-even analysis shows that a sales territory is a cost- and revenue-generating profit center. Therefore, priorities must be established on account calls to maximize territory profits.

Question 11

Which of the following is NOT one of the seven basic factors to consider in the allocation of a salesperson's time?
A) Frequency of customer sales calls
B) Return on time invested
C) Nonselling time
D) Compensation
E) Travel time

Accepted Answer

Compensation is not one of the seven basic factors to consider in the allocation of a salesperson's time. The seven basic factors include frequency of customer sales calls, return on time invested, nonselling time, travel time, customer potential and status, product and market characteristics, and the salesperson's abilities and experience.

Question 12

Which of the following would be a good rule for salespeople to follow in handling their paperwork?
A) Avoid paperwork so that more time is available for sales presentations.
B) Politely interrupt a sales interview to get paperwork finished.
C) Finish paperwork during non-selling times and evenings.
D) Manage paperwork on a once-a-month basis.
E) Handle paperwork throughout the day.

Accepted Answer

It is important for salespeople to give their full attention to sales interviews and not interrupt them to complete paperwork. Avoiding paperwork altogether is not a good practice, and managing paperwork once a month is too infrequent. Handling paperwork throughout the day can be a distraction from selling activities. Therefore, the best choice is to finish paperwork during non-selling times, such as evenings or other designated times outside of sales interviews.

Question 13

A salesperson invests time in direct proportion to the actual or potential sales that the account represents. This relationship of sales volume to sales calls is the:
A) sales response function.
B) break-even function.
C) time allocation coefficient.
D) territory coefficient.
E) alternate correlation.

Accepted Answer

The described relationship is known as the sales response function, where the amount of time a salesperson invests in a potential or actual account is directly related to the amount of sales that can be generated from that account. The other answer choices are not consistent with this concept.

Question 14

A territory's break-even point can be computed in terms of dollars by dividing the _____ with gross profit percentage.
A) salesperson's sales revenue
B) gross sales
C) total sales
D) salesperson's fixed costs
E) salesperson's total work hours

Accepted Answer

The break-even point is calculated by dividing the salesperson's fixed costs by gross profit percentage.

Question 15

Which of the following rules should a salesperson adopt in order to have more productive lunch periods?
A) Monitor the time to avoid monopolizing too much of the buyer's day.
B) Have an alcoholic drink only if the client makes the suggestion.
C) Conduct part of the sales presentation during lunch using a laptop.
D) When lunching alone, use the time to read something relaxing.
E) Offer to purchase the customer a lunchtime cocktail or dessert.

Accepted Answer

Monitoring the time during a lunch meeting shows respect for the buyer's time and ensures that the meeting doesn't last longer than necessary, leading to a more productive lunch period.

Question 16

Madison works for a weed killer manufacturing company. The products have only been available in a concentrated liquid form, but now the firm is introducing a pre-mixed version that should be easier for consumers to use. Madison will most likely increase the frequency of sales calls because:
A) the available supply is limited and costly.
B) there is no competition within the sales territory.
C) demand is low for his company's older products.
D) customers are less likely to buy products from the competition.
E) his company has increased the number of product lines available.

Accepted Answer

Madison will increase the frequency of calls because there has been an increase in the number of product lines sold. Madison needs to make customers aware of the new product.

Question 17

According to the text, which of the following is one of the seven basic factors to be considered in the allocation of a salesperson's time?
A) Nonselling time
B) Product price
C) Total revenue of the company
D) Number of competitors
E) Estimated sales volume

Accepted Answer

According to the text, one of the basic factors to be considered in the allocation of a salesperson's time is nonselling time.

Question 18

_____ is a quantitative technique for determining the level of sales at which total revenues equal total costs.
A) Sales response function
B) Equilibrium analysis
C) Variable cost analysis
D) Break-even analysis
E) ELMS function

Accepted Answer

Break-even analysis is a quantitative technique used to determine the point at which total revenues equal total costs, resulting in zero profit or loss. It helps determine the level of sales necessary to cover all costs, including fixed and variable costs, and can assist in decision-making related to pricing, production, and overall profitability.

Question 19

The difference between sales and _____ is the gross profit on sales revenue.
A) fixed costs
B) variable costs
C) cost of goods sold
D) total productive hours
E) average annual expenses

Accepted Answer

The cost of goods sold (COGS) is the cost incurred in producing or purchasing the products that are sold and includes the cost of raw materials, labor, and overhead expenses. The gross profit on sales revenue is the revenue generated from sales minus the cost of goods sold. Therefore, the difference between sales and COGS is the gross profit. Fixed costs (A) and variable costs (B) are not directly related to sales revenue, while total productive hours (D) and average annual expenses (E) are not relevant to the calculation of gross profit.

Question 20

Based on the following data, calculate the breakeven point. Sales = $500,000
Transportation = $10,000
Gross Profit = $200,000
Lodging and Meals = $8,000
Salary = $37,000
Other expenses = $5,000
A) $150,000
B) $130,000
C) $100,0003
D) $86,667
E) Cannot be calculated with the information given

Accepted Answer

Gross profit percentage = Gross profit/sales = $200,000/$500,000 = 40%
BEP = Fixed costs/gross profit % = $60,000/40% = $150,000

Quiz 15: Time, Territory, and Self-Management: Keys to Success

As a sales rep for Healthtex, Linda plans her activities for the next week; she establishes a fixed day and time to visit each customer's place of business. She is engaged in the process of:

Meredith Jacoby sells floral supplies. Her annual sales equal $450,000. Her total fixed costs annually equal $75,000.The cost of goods sold annually is $335,000. Calculate her gross profit percentage.

The J&L Grocery Distribution Company characterizes its customers according to their yearly sales potential and whether the account is a retailer, wholesaler, or government agency. This approach to segmentation is called:

Based on the following data, calculate the breakeven point in dollars: Sales = $400,000 Gross Profit = $100,000 Transportation = $8,000 Cost of Goods Sold = $280,000 Expenses = $10,000 Salary = $40,000

Ryan Hester sells building supplies. His annual sales equal $450,000. His total fixed costs annually equal $75,000. The cost of goods sold annually is $335,000. Ryan's break-even point in terms of total sales is approximately:

"To increase the product assortment purchased by current customers by two percent during the next three months," is an example of a(n) :

According to the suggestions in the text, daily planning by the salesperson would be LEAST likely to include:

Which of the following can be used to calculate the costs and revenues of sales territories?

Which of the following is NOT one of the seven basic factors to consider in the allocation of a salesperson's time?

Which of the following would be a good rule for salespeople to follow in handling their paperwork?

A salesperson invests time in direct proportion to the actual or potential sales that the account represents. This relationship of sales volume to sales calls is the:

A territory's break-even point can be computed in terms of dollars by dividing the _____ with gross profit percentage.

Which of the following rules should a salesperson adopt in order to have more productive lunch periods?

Madison works for a weed killer manufacturing company. The products have only been available in a concentrated liquid form, but now the firm is introducing a pre-mixed version that should be easier for consumers to use. Madison will most likely increase the frequency of sales calls because:

According to the text, which of the following is one of the seven basic factors to be considered in the allocation of a salesperson's time?

_____ is a quantitative technique for determining the level of sales at which total revenues equal total costs.

The difference between sales and _____ is the gross profit on sales revenue.

Based on the following data, calculate the breakeven point. Sales = $500,000 Transportation = $10,000 Gross Profit = $200,000 Lodging and Meals = $8,000 Salary = $37,000 Other expenses = $5,000