Question 1

"To increase the product assortment purchased by current customers by two percent during the next three months," is an example of a(n):

Accepted Answer

Increasing the assortment of products purchased by two percent is an account objective. Other objectives might be increasing product distribution to prospects in the territory or increasing the number of sales calls.

Question 2

Mario Jimenez sells electrical supplies.His annual sales equal $450,000.His total fixed costs annually equal $75,000.The cost of goods sold annually is $335,000.Mario works an average of 240 days a year and 8 hours each day.Mario makes an average of five sales calls per day.Mario's break-even volume per hour is approximately:

Accepted Answer

Gross profit = annual sales - cost of goods sold = $450,000 - $335,000 = $115,000
Gross profit percentage = Gross profit/sales = $115,000/$450,000 = 25.6%
BEP = Fixed costs/gross profit % = $75,000/25.6% = $292,968.75
Hours worked per year = 240 x 8 = 1,920 hours
Mack's cost per hour = $75,000/1,920 = $39.06
Break-even volume per hour = cost per hour/gross profit % = $39.06/25.6% = $152.58

Question 3

According to the suggestions in the text,daily planning by the salesperson would be LEAST likely to include:

Accepted Answer

Daily planning starts the night before, as the salesperson selects the next day's prospects, determines the time to contact the customer, organizes facts and data, and prepares sales presentation materials. Monthly rather than daily planning might include an analysis of territory profits and losses.

Question 4

The J&L Grocery Distribution Company characterizes its customers according to their yearly sales potential and whether the account is a retailer,wholesaler,or government agency.This approach to segmentation is called:

Accepted Answer

The firm is using multivariable account segmentation, which uses more than one criterion to characterize the organization's accounts. The type of market, environment, account sales potential, and sales volume are major variables for segmenting accounts.

Question 5

Meredith Jacoby sells floral supplies.Her annual sales equal $450,000.Her total fixed costs annually equal $75,000.The cost of goods sold annually is $335,000.Calculate her gross profit percentage.

Accepted Answer

Gross profit = annual sales - cost of goods sold = $450,000 - $335,000 = $115,000
Gross profit percentage = Gross profit/sales = $115,000/$450,000 = 25.6%

Question 6

Which of the following would be a good rule for salespeople to follow in handling their paperwork?

Accepted Answer

Effective salespeople do paperwork during nonselling times; evenings are best. Many companies note these records and reports in performance evaluations of salespeople, and the salesperson should keep them current rather than once a month.

Question 7

_____ is a quantitative technique for determining the level of sales at which total revenues equal total costs.

Accepted Answer

Break-even analysis is a quantitative technique for determining the level of sales at which total revenues equal total costs. Break-even analysis determines how much sales volume a salesperson must generate to meet costs in a territory.

Question 8

Madison works for a weed killer manufacturing company.The products have only been available in a concentrated liquid form,but now the firm is introducing a pre-mixed version that should be easier for consumers to use.Madison will most likely increase the frequency of sales calls because:

Accepted Answer

Madison will increase the frequency of calls because there has been an increase in the number of product lines sold. Madison needs to make customers aware of the new product.

Question 9

According to the text,which of the following is one of the seven basic factors to be considered in the allocation of a salesperson's time?

Accepted Answer

Time allocation is the time spent by the salesperson traveling around the territory and calling on accounts. There are seven basic factors to consider in time allocation including nonselling time, the number of accounts in the territory, and the number of sales calls made on customers.

Question 10

Ryan Hester sells building supplies.His annual sales equal $450,000.His total fixed costs annually equal $75,000.The cost of goods sold annually is $335,000.Ryan's break-even point in terms of total sales is approximately:

Accepted Answer

Gross profit = annual sales - cost of goods sold = $450,000 - $335,000 = $115,000
Gross profit percentage = Gross profit/sales = $115,000/$450,000 = 25.6%
BEP = Fixed costs/gross profit % = $75,000/25.6% = $292,968.75

Question 11

Based on the following data,calculate the breakeven point in dollars: Sales = $400,000
Gross Profit = $100,000
Transportation = $8,000
Cost of Goods Sold = $280,000
Expenses = $10,000
Salary = $40,000

Accepted Answer

Gross profit percentage = Gross profit/sales = $100,000/$400,000 = 25%
BEP = Fixed costs/gross profit % = $58,000/25% = $232,000

Question 12

Which of the following is NOT one of the seven basic factors to consider in the allocation of a salesperson's time?

Accepted Answer

There are seven basic factors to consider in time allocation including frequency of calls, return on time invested, nonselling time, and travel time around the territory. Compensation is not a factor to consider.

Question 13

Which of the following can be used to calculate the costs and revenues of sales territories?

Accepted Answer

The break-even analysis shows that a sales territory is a cost- and revenue-generating profit center. Therefore, priorities must be established on account calls to maximize territory profits.

Question 14

Based on the following data,calculate the breakeven point. Sales = $500,000
Transportation = $10,000
Gross Profit = $200,000
Lodging and Meals = $8,000
Salary = $37,000
Other expenses = $5,000

Accepted Answer

Gross profit percentage = Gross profit/sales = $200,000/$500,000 = 40%
BEP = Fixed costs/gross profit % = $60,000/40% = $150,000

Question 15

A salesperson invests time in direct proportion to the actual or potential sales that the account represents.This relationship of sales volume to sales calls is the:

Accepted Answer

Typically, the salesperson invests sales time in direct proportion to the actual or potential sales that the account represents. The most productive number of calls is reached at the point at which additional calls do not increase sales. This relationship of sales volume to sales calls is the sales response function of the customer to the salesperson's calls.

Question 16

A territory's break-even point can be computed in terms of dollars by dividing the _____ with gross profit percentage.

Accepted Answer

The break-even point is calculated by dividing the salesperson's fixed costs by gross profit percentage.

Question 17

James Lambert is an assistant territory sales manager at Cellcom,a leading wireless service provider in Europe.James manages the salespeople in a small city in France.There are many players in the wireless service provider market,and it is becoming increasingly difficult to position the company as unique.What can James do to position Cellcom as a unique company,when compared to its competitors?

Accepted Answer

James should strive to create the image that Cellcom is uniquely better than the competition. One way to accomplish this is to spend more time on each sales call and to make more total sales calls during the year, thus providing a problem-solving approach to servicing accounts.

Question 18

As a sales rep for Healthtex,Linda plans her activities for the next week; she establishes a fixed day and time to visit each customer's place of business.She is engaged in the process of:

Accepted Answer

Scheduling refers to establishing a fixed time (day and hour) for visiting a customer's business. Routing is the travel pattern used in working a territory.

Question 19

Which of the following rules should a salesperson adopt in order to have more productive lunch periods?

Accepted Answer

During a business lunch, salespeople must keep an eye on the clock and not monopolize too much of the buyer's time. They should not have a lunchtime cocktail, which may make the salesperson less alert and may be against company policy. A salesperson's lunch is time to review activities and further plan the afternoon.

Question 20

The difference between sales and _____ is the gross profit on sales revenue.

Accepted Answer

The difference between cost of goods sold and sales is the gross profit on sales revenue. Gross profit should be large enough to cover selling expenses.

Quiz 15: Time, Territory, and Self-Management: Keys to Success

"To increase the product assortment purchased by current customers by two percent during the next three months," is an example of a(n) :