A Company Produces Three Product Lines and a Different Marketing

question 43

Multiple Choice

A company produces three product lines and a different marketing manager is responsible for each line. Most marketing expenses are specific to each line, but a common sales force sells all three lines. Sales reps are paid by commission, with a different commission for each product line. In this case, in a marketing cost analysis,

• A) the contribution-margin approach would probably divide personal selling expense based on commission expense for each product line.
• B) a full-cost approach would ignore commission expense since it is not a fixed cost.
• C) sales commissions are a variable expense and would not be considered in the contribution-margin approach.
• D) the full-cost approach would be easier to do if all sales reps were paid a straight salary.
• E) None of the above is true.

---

Definitions:

Arthur Andersen

Arthur Andersen was once one of the Big Five accounting firms, known for its audit, tax, and consulting services until its involvement in corporate scandals, such as the Enron scandal, led to its downfall.

PRWeek

A leading trade publication in the field of public relations, offering news, analysis, and opinion to the PR and marketing professions.

Social Media

represents the websites and applications that enable users to create and share content or to participate in social networking, playing a crucial role in modern communication and marketing.

Censored

The suppression or prohibition of any parts of books, films, news, etc. that are considered obscene, politically unacceptable, or a threat to security.