In Terms of Selecting an Advertising Agency, Requesting Client References

question 173

True/False

In terms of selecting an advertising agency, requesting client references should occur before the initial list of applicants is screened, because the client list can be used to eliminate agencies where there is a conflict of interest.

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Definitions:

Net Operating Income

The profit a company makes from its operations, calculated as total revenue minus operating expenses, excluding taxes and interest.

Variable Costing

An accounting method that only includes variable production costs—direct materials, direct labor, and variable manufacturing overhead—in product costs.

Absorption Costing

A product costing technique that adds up all manufacturing expenses — direct materials, direct labor, variable, and fixed overheads — into the comprehensive cost of the product.

Net Operating Income

The total profit of a company after operating expenses are subtracted from operating revenues.