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.

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Definitions:

Normal Culture

The shared norms, values, traditions, and practices that are considered standard and acceptable within a particular society or social group.

Perception of Deviance

The way in which society views and categorizes behaviors or individuals that deviate from the norm.

Different Groups

A reference to categorized sets of individuals or entities based on shared characteristics, interests, or attributes, which distinguish them from others within a community or society.

Relative

Something having significance or bearing in relation to something else; depending on the context or comparison to other factors.