Manufacturers' Agents

question 309

Multiple Choice

Manufacturers' agents

• A) represent a single producer and carry all products in the producer's lines.
• B) work for several producers and carry noncompetitive, complementary merchandise in an exclusive territory.
• C) take title to merchandise but sell only to buyers that call on them, pay cash for merchandise, and furnish their own transportation for merchandise.
• D) own the merchandise they sell but do not physically handle, stock, or deliver it.
• E) furnish the racks or shelves that display merchandise in retail stores, perform all channel functions, and sell on consignment to retailers.

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Definitions:

Incremental Cost

The additional cost associated with producing one more unit of a product.

Step-Wise Cost

Costs that remain constant for a certain level of activity but jump to a higher amount once a threshold is crossed.

Fixed Cost

Overheads that stay stable no matter the production or sales figures, involving costs like property rent, employee salaries, and insurance policies.

Relevant Range

The span of activity level or volume in which the specific assumptions of cost behavior are considered to be applicable.