A Producer Has a Few Territories Where Many Big Customers

question 155

Multiple Choice

A producer has a few territories where many big customers are concentrated, but most of its target customers are spread all over the country.

• A) The company should use manufacturers' agents in the best territories and sales branches in the others, since good agents won't work in the smaller territories.
• B) The company should use sales branches everywhere, since it will cost more to use manufacturers' agents.
• C) The company will probably have to rely only on manufacturers' agents, since they will only be willing to take the widely scattered markets if they can have the good territories too.
• D) The company should use sales branches in the concentrated territories and manufacturers' agents in the others-assuming the concentrated territories are large enough to support sales branches.
• E) All of these are good alternatives.

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Definitions:

Product Costs

Expenses directly tied to the production of goods or services, including labor, materials, and overhead costs.

Statement of Cost

A detailed report outlining the total costs associated with the production or procurement of goods and services, including materials, labor, and overhead.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, indicating its net income or loss.

Manufacturing Company

A type of business that produces finished goods from raw materials through the use of labor, machinery, tools, and chemical or biological processing or formulation.