The Amount of Profit a Channel Member Expects Depends on

question 41

Multiple Choice

The amount of profit a channel member expects depends on

• A) the amount of discounts for large orders provided by the producers.
• B) the number of channel support activities provided by the producers.
• C) what the intermediary could earn if it were handling a competing product instead.
• D) the type of distribution channels involved.
• E) the amount of effort required to carry the product.

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Definitions:

Variable Cost

Expenses that vary in direct proportion to changes in the level of production or sales volume.

Fixed Cost

Costs that remain constant in total amount with changes in the volume of activity, such as rent and salaries.

Mixed Cost

Expenses that have both fixed and variable components, changing with the level of activity but also containing a static element.

Margin Of Safety

The difference between actual or projected sales and the break-even point, indicating the amount of sales that can decline before a business incurs a loss.