MetroTech Corporation Has Been Experiencing Declining Profits

question 290

Multiple Choice

MetroTech Corporation has been experiencing declining profits. The accounting department blames the MetroTech marketing staff for "out of control" sales costs. The salespeople blame the warehouse for being slow to fill orders. And the warehouse manager says that the production department can't meet its schedule. MetroTech seems to have

• A) implemented the marketing concept.
• B) a customer orientation.
• C) a marketing orientation.
• D) a sales orientation.
• E) a production orientation.

Analyze the effect of additional discounts on sale prices and profitability.

Calculate operating expenses as a percentage of selling price.

Determine the breakeven price for retail items.

Calculate profit or loss realized from the sale of an item based on cost, selling price, and operating expenses.

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Definitions:

Percentage of Sales Approach

A financial planning model that estimates changes in balance sheet and income statement items as a direct percentage of changes in sales.

Financial Planning Method

A systematic approach to setting financial goals, developing and implementing plans to achieve those goals, and monitoring progress.

Predicted Sales

Forecasted revenue from goods or services sold over a future period, based on current trends or analyses.

Sales Dilution Approach

A method used in finance to estimate the impact of issuing new shares on the earnings per share by assuming no increase in sales.