You Are Meeting to Discuss the Proper Categorization of Marketing

question 100

Multiple Choice

You are meeting to discuss the proper categorization of marketing strategy costs in the monthly department budget performance report. You are especially interested in making sure the fixed and variable costs are properly categorized.

The major costs associated with the marketing strategy are as follows:
A. Salesperson commissions
B. Office space rent
C. Office equipment rental
D. Product raw materials
E. Product manufacturing labor
With respect to the variable or fixed nature of these costs,

• A) we know that product raw materials and office space rent are both fixed costs.
• B) we know that salesperson commissions, product raw materials, and product manufacturing labor costs are all variable costs.
• C) we know that office equipment rental, office space rent and sales commissions are all fixed costs.
• D) we know that office space rent is a variable cost.
• E) we know that product manufacturing labor is a fixed cost.

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Definitions:

Competitors

Businesses or individuals that compete within the same market for customers or resources.

Geographic Boundary

The defined physical demarcation of an area, region, or territory based on natural or artificial borders.

Retail Gasoline

The sale of gasoline to consumers through service stations, reflecting the final step in the distribution of petroleum products.

Purchasing Power

The financial ability to buy products and services, which depends on income, prices, and the overall economic climate.