A Dealer Premium Is an Additional Incentive Offered by a Manufacturer

question 62

Multiple Choice

A dealer premium is an additional incentive offered by a manufacturer to a distributer to

• A) increase profit margins
• B) encourage a special purchase
• C) increase advertising
• D) reduce inventory
• E) increase stock turns

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Definitions:

Fixed Selling

Costs associated with selling products that remain constant regardless of the level of production or sales, such as salaries of sales personnel and rent of the sales office.

Financial Advantage

The benefit gained in financial terms that gives an individual or business a superior position relative to competitors.

Traceable Fixed Costs

Fixed costs that can be directly associated with a specific business segment or area.

Net Operating Income

The profit generated from a company's everyday business operations, indicating the company's ability to generate income through sales after covering operating expenses.