Third Consideration in Choosing a Marketing Channel Is Profitability,which Is

question 338

Multiple Choice

third consideration in choosing a marketing channel is profitability,which is determined by the margins earned for each channel member and for the channel as a whole.Based on this information,which of the following statements would be most accurate?

• A) The more responsibilities a channel member takes in terms of distribution, advertising, and selling expenses, the greater the potential for manufacturer profitability.
• B) The more responsibilities the manufacturer assumes relative to its channel members, the greater the potential for profitability.
• C) The extent to which channel members share costs determines the margins received by each member and by the channel as a whole.
• D) While channel members can increase profitability by taking on distribution and selling expenses, advertising expenses should always remain with the manufacturer if a firm is looking for the greatest profitability.
• E) Profitability is not related to the length or nature of the distribution chain but determined by the manufacturer.

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Definitions:

Conversion Costs

The combined costs of direct labor and manufacturing overhead, representing the expenses to convert raw materials into finished goods.

Cost Per Equivalent Unit

A calculation used in process costing, dividing the total cost by the number of units produced to determine the cost per unit.

Conversion Costs

Costs required to convert raw materials into finished products, usually including direct labor and manufacturing overhead.

Conversion Costs

The costs required to convert raw materials into finished goods, which typically include direct labor and manufacturing overhead.