Question 1

Companies establish sales territories to accomplish all of the following objectives EXCEPT to:

Accepted Answer

Sales territories are established for reasons such as setting responsibilities for salespeople, avoiding duplicated sales efforts, creating goodwill with customers, and meeting sales goals. They are not directly established to control corporate credit ratings, as credit ratings are influenced by broader financial practices and performance metrics beyond sales territory management.

Question 2

Which of the following statements about sales territories is INCORRECT?

Accepted Answer

Geographic boundaries are a common way to define sales territories, but it's incorrect to state that they are the only way. Sales territories can also be defined by customer type, product lines, or other criteria, not just geographic boundaries.

Question 3

Mack Jacoby 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. Calculate his gross profit percentage.

Accepted Answer

Gross profit percentage = (Gross profit / Sales) * 100Gross profit = Sales - Cost of goods soldGross profit = $450,000 - $335,000Gross profit = $115,000Gross profit percentage = ($115,000 / $450,000) * 100Gross profit percentage = 25.6%

Question 4

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

Accepted Answer

Salespeople should aim to finish their paperwork during non-selling times and evenings so that they can fully focus on sales presentations during business hours. This will also help prevent interruptions to the sales interview. Handling paperwork throughout the day can be distracting and inefficient, and waiting until once-a-month can lead to a backlog of paperwork and important tasks being forgotten. Avoiding paperwork altogether is not a viable option, as it is necessary for tracking sales and maintaining accurate records.

Question 5

Gross profit is the difference between:

Accepted Answer

Gross profit is calculated by subtracting the cost of goods sold (COGS) from the sales revenue. This figure does not account for other expenses such as taxes, fixed costs, or transportation costs.

Question 6

The annual break-even point of a salesperson is $2,000,000 and his per month salary is $10,000. This means that:

Accepted Answer

The break-even point refers to the amount of revenue needed to cover all costs, not just profit. Therefore, the salesperson needs to generate sales worth $2,000,000 every year to cover all costs, including his salary.

Question 7

Robert is the CEO of a small firm which manufactures inverters. Company sales have been increasing, and Robert finds it increasingly difficult to manage the salespeople. The company has a sufficient number of salespeople, but they are not able to reach all current and potential customers. Robert also has difficulties in evaluating the performance of salespeople. What advice can you give Robert?

Accepted Answer

Assigning salespeople to different groups of customers can help ensure better coverage and make it easier to evaluate their performance based on specific customer segments.

Question 8

Which one of the following is a time management skill that can help sales professionals in achieving success:

Accepted Answer

E) Always maintaining a systematic account for the outcomes aimed to be achieved before allocating time to these outcomes is a crucial time management skill. It helps in prioritizing tasks based on their importance and urgency, leading to more effective and efficient work.

Question 9

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 10

A(n) ________ comprises a group of customers or a geographical area assigned to a salesperson.

Accepted Answer

A sales territory is defined as a group of customers or a geographical area assigned to a salesperson. This concept is used to organize a sales force's efforts and responsibilities efficiently.

Question 11

Mack Jacoby 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. Mack works an average of 240 days a year and 8 hours each day. Mack makes an average of five sales calls per day. Mack's break-even volume per hour is approximately:

Accepted Answer

To calculate the break-even volume per hour, first determine the total variable costs and the contribution margin. The cost of goods sold (COGS) is $335,000, which are variable costs. The sales are $450,000. Therefore, the contribution margin is sales minus variable costs, which equals $450,000 - $335,000 = $115,000. The fixed costs are $75,000. The break-even point in dollars is the fixed costs divided by the contribution margin ratio (contribution margin divided by sales). The contribution margin ratio is $115,000 / $450,000 = 0.2556. The break-even point in dollars is $75,000 / 0.2556 = $293,255.20 annually. To find the break-even volume per hour, divide this by the total working hours in a year. Mack works 240 days a year for 8 hours each day, which is 1,920 hours (240 days * 8 hours). Therefore, the break-even volume per hour is $293,255.20 / 1,920 hours = approximately $152.73, which rounds to about $153.00.

Question 12

Mack Jacoby 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. Mark's break-even point in terms of total sales is approximately:

Accepted Answer

The answer of Mack Jacoby sells building supplies. His annual...

Question 13

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

Accepted Answer

Monitoring the time allows for the salesperson to be respectful of the buyer's time and not take up too much of their day. This can lead to a more productive lunch period and a better chance of securing a sale in the future. The other choices may be inappropriate or unprofessional in certain situations, such as conducting a sales presentation during a social lunch or offering an alcoholic drink without considering the buyer's preferences or workplace policies.

Question 14

How do sales territories benefit a company's customers?

Accepted Answer

Establishing sales territories helps in creating and maintaining relationships between buyers and sellers, which can lead to better understanding of customer needs, more personalized service, and stronger, more reliable communication channels.

Question 15

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 16

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

Accepted Answer

Break-even analysis is used to calculate the costs and revenues of sales territories to determine the point at which sales will cover costs, helping in decision-making regarding profitability.

Question 17

A sales territory:

Accepted Answer

A sales territory typically includes both present and potential customers, allowing sales teams to focus their efforts on specific areas and improve customer relations.

Question 18

Which of the following statements about sales territories is true?

Accepted Answer

Sales territories are strategically designed to maximize the sales potential of a market by ensuring efficient coverage and resource allocation.

Question 19

Which one of the following is NOT a time management skill that can help sales professionals in achieving success:

Accepted Answer

Option E is incorrect because maintaining accountability for outcomes is crucial in effective time management, not something to avoid. It helps in setting clear goals and allocating time efficiently to achieve these outcomes.

Question 20

Which of the following activities is NOT an appropriate thing to do while you, the salesperson, are waiting to see a buyer?

Accepted Answer

Reading a magazine to clear your head and relax is not directly related to the sales task at hand and does not contribute to the preparation or effectiveness of the sales meeting.

Quiz 14: Time, Territory, and Self-Management: Keys to Success