Question 1

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

Accepted Answer

Break-even analysis is a quantitative technique used to determine the level of sales at which total revenues equal total costs. It helps businesses to identify the minimum sales volume required to avoid losses, make a profit or reach a desired level of income.

Question 2

The annual break-even point of a salesperson is $2,000,000 and his per month salary is $10,000.This means that:
A)the salesperson should generate $2,000,000 gross profit every year to cover the costs.
B)the salesperson should generate sales worth $2,000,000 every year to cover the costs.
C)the salesperson should generate $2,000,000 net profit every year to cover the costs.
D)the salesperson should generate gross profit worth $80,000 to cover the costs.
E)the salesperson is generating $80,000 profit compared to his fixed cost.

Accepted Answer

The break-even point refers to the sales amount that covers all the costs, including the salary of the salesperson. In this case, the break-even point is $2,000,000 per year. Therefore, to cover the costs, the salesperson should generate sales worth $2,000,000 per year or more. Option A is incorrect as it states "gross profit," not sales. Option C is incorrect as it assumes that the salesperson keeps all the profit generated. Option D is incorrect as it refers to gross profit, which does not cover the fixed costs. Option E is incorrect as it doesn't make sense to compare profit to fixed costs in this way.

Question 3

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 4

Mack Jacoby 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.Calculate his gross profit percentage.
A)11.9%
B)20.3%
C)25.6%
D)34.3%
E)Cannot be determined from information given

Accepted Answer

The answer of Mack Jacoby sells building supplies.His annual sales...

Question 5

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)break-even point.
B)sales response function.
C)basis for time allocation.
D)basis for territory formation.
E)correlation of effort and skill.

Accepted Answer

The sales response function describes the correlation between sales volume and sales effort, and is used to determine the optimal number of sales calls necessary to achieve a desired level of sales. Salespeople allocate their time based on this function, investing more time into accounts with higher potential sales. The other options, such as break-even point, territory formation, and correlation of effort and skill, are all important concepts in sales but do not specifically relate to the relationship between sales volume and sales calls.

Question 6

Mack Jacoby 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.Mack works an average of 240 days a year and 8 hours each day.Mack makes an average of five sales calls per day.Mack'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 calculate the break-even volume per hour, first determine the total variable costs and the contribution margin. The cost of goods sold (COGS) is $335,000, which are variable costs. The sales are $450,000. Therefore, the contribution margin is sales minus variable costs, which equals $450,000 - $335,000 = $115,000. The fixed costs are $75,000. The break-even point in dollars is the fixed costs divided by the contribution margin ratio (contribution margin divided by sales). The contribution margin ratio is $115,000 / $450,000 = 0.2556. The break-even point in dollars is $75,000 / 0.2556 = $293,255.20 annually. To find the break-even volume per hour, divide this by the total working hours in a year. Mack works 240 days a year for 8 hours each day, which is 1,920 hours (240 days * 8 hours). Therefore, the break-even volume per hour is $293,255.20 / 1,920 hours = approximately $152.73, which rounds to about $153.00.

Question 7

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 8

Which of the following is a basic factor to consider in time allocation?
A)Nonselling time
B)Cost of goods sold
C)Personality style of customers
D)Structure of sales presentation
E)Revenue projections for the year

Accepted Answer

Nonselling time, which includes tasks that are not directly related to selling, such as administrative tasks, must be taken into account when allocating time. The other options, such as cost of goods sold, personality style of customers, structure of sales presentation, and revenue projections, may also be important considerations but are not basic factors in time allocation.

Question 9

You are the salesperson for a manufacturing business that makes various scents used in soap and candle making.Your sales manager expects your frequency of sales calls on a particular customer will increase when the:
A)complexity of the scent mixtures sold decreases.
B)number of orders placed for different scents diminishes.
C)future sales potential for your company's products decreases.
D)number of product lines sold carried by the wholesaler increases.
E)total number of managerial levels increases at the end of the year.

Accepted Answer

The number of product lines sold carried by the wholesaler increasing would likely necessitate more frequent sales calls to manage the expanded range of products, ensure proper inventory levels, and optimize sales strategies for the new variety of scents.

Question 10

"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 account objective, which is a specific goal for a salesperson or account manager to achieve with a particular customer. The objective is to increase the product assortment purchased by current customers by two percent during the next three months. This is a specific, measurable, and time-bound goal that is focused on increasing sales with existing customers. A market quota is a predetermined sales objective for a particular market or territory. Derived demand refers to the demand for a product that is driven by the demand for another product or service. Future product quotient and net product forecast are not relevant in this context.

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, product/service potential, and competitive factors.

Question 12

Which among the following is NOT a reason for increasing the number of sales calls?
A)Increase of potential future sales
B)Increase of orders placed
C)Increase of product lines sold
D)Increase of cost of goods sold
E)Increase in servicing requirements

Accepted Answer

Increasing the number of sales calls does not directly affect the cost of goods sold. The other options (A, B, C, and E) are all potential benefits of increasing the number of sales calls.

Question 13

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

Accepted Answer

The answer of Which of the following is used to...

Question 14

Mack Jacoby 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.Mark'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

The answer of Mack Jacoby sells building supplies.His annual sales...

Question 15

Which of the following is one of the seven basic factors the text indicates must be considered in the allocation of a salesperson's time?
A)Types of products being sold
B)Cost of goods sold
C)Personality of the salesperson
D)Number of visual aids used in sales presentation
E)Number of accounts in the territory

Accepted Answer

The number of accounts in the territory is one of the seven basic factors that must be considered in the allocation of a salesperson's time. The other six factors are potential sales volume, geographical location of accounts, travel time between accounts, seasonal factors, complexity of products being sold, and degree of competition in the territory. None of the other options listed are considered as basic factors in the allocation of a salesperson's time.

Question 16

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

Question 17

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

While analyzing territorial gains and losses is an important aspect of sales management, it is typically not a task included in a salesperson's daily planning. The other tasks listed are all common components of daily planning for a salesperson.

Question 18

Gross profit is the difference between:
A)sales revenue and costs of goods sold.
B)sales revenue and fixed costs of the salesperson.
C)sales revenue and costs of goods sold including taxes.
D)net profit and transportation cost.
E)total sales and manufacturing cost.

Accepted Answer

Gross profit is calculated by subtracting the cost of goods sold (COGS) from sales revenue. It does not include fixed costs of salespeople, taxes, net profit, transportation costs, or manufacturing costs.

Question 19

If a territorial evaluation indicates that a salesperson's quotas are not met,then it is most likely that:
A)territories will be expanded.
B)sales methods will be changed.
C)routing will be re-measured.
D)key accounts will be dropped.
E)new territory plans will be developed.

Accepted Answer

The answer of If a territorial evaluation indicates that a...

Question 20

The total fixed cost for Harold,a salesperson,is $20,000 per month.Harold generates 25% gross profit on the products he sells.If Harold sells $200,000 worth of merchandise in six months,which of the following statements is true?
A)By having Harold,the company incurred a direct loss of $70,000.
B)Harold generated $120,000 in gross profit for the company.
C)Harold sold $120,000 worth of goods,which equals the BEP.
D)By having Harold,the company incurred a direct loss of $280,000.
E)Harold generated $30,000 gross profit for the company.

Accepted Answer

The answer of The total fixed cost for Harold,a salesperson,is...

Quiz 14: Time, territory, and Self-Management: Keys to Success

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

The annual break-even point of a salesperson is $2,000,000 and his per month salary is $10,000.This means that:

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

Mack Jacoby 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.Calculate his gross profit percentage.

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:

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:

Which of the following is a basic factor to consider in time allocation?

You are the salesperson for a manufacturing business that makes various scents used in soap and candle making.Your sales manager expects your frequency of sales calls on a particular customer will increase when the:

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

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

Which among the following is NOT a reason for increasing the number of sales calls?

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

Mack Jacoby 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.Mark's break-even point in terms of total sales is approximately:

Which of the following is one of the seven basic factors the text indicates must be considered in the allocation of a salesperson's time?

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

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

Gross profit is the difference between:

If a territorial evaluation indicates that a salesperson's quotas are not met,then it is most likely that:

The total fixed cost for Harold,a salesperson,is $20,000 per month.Harold generates 25% gross profit on the products he sells.If Harold sells $200,000 worth of merchandise in six months,which of the following statements is true?