A Company Produces Three Product Lines and a Different Marketing

question 93

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 these is true.

---

Definitions:

Evidence

Information or facts that are used to support the validity of an assertion, argument, or conclusion.

Age of Information

The current era, characterized by the rapid creation, dissemination, and utilization of information, largely facilitated by digital technologies.

Attitudes

A settled way of thinking or feeling about something, which reflects an individual's views, beliefs, or feelings.

Particular Attitude

A specific or distinct perspective or feeling toward a person, object, or situation.