Question 1

In marketing cost analyis, all of the following are considered natural accounts EXCEPT:
A) salaries.
B) raw materials.
C) wages.
D) office supplies.
E) packing and shipping.

Accepted Answer

Packing and shipping is considered a functional account, not a natural account, as it relates to the specific function of distributing products rather than a general expense category.

Question 2

In the factory, _____ show the purpose for which expenditures are made.
A) natural accounts
B) live accounts
C) functional accounts
D) defined accounts
E) deferred accounts

Accepted Answer

Functional accounts show the purpose for which expenditures are made in a factory or any organization. They are used to categorize expenses based on the function or activity for which they are incurred, such as production, marketing, or administration. Natural accounts describe the type of expense (such as wages, materials, or rent), while live accounts are active accounts with current transactions. Defined accounts are accounts with specific criteria or limitations, and deferred accounts are assets or liabilities that are recognized at a later time.

Question 3

At Dell's Web site, a student can order a laptop computer with the exact memory capability and software that she wants, and have it shipped to her dorm room within 48 hours. This is an example of:
A) Combined target market approach
B) Task transfer
C) Mass customization
D) Diversification strategy
E) Single target market approach

Accepted Answer

This scenario describes mass customization, as Dell is able to provide personalized products to individual customers within a short period of time by leveraging technology and efficient supply chain operations. The other options do not accurately describe this situation.

Question 4

Which of the following is an example of a FUNCTIONAL cost account?
A) Auto repairs
B) Advertising
C) Taxes
D) Social Security
E) Any of the above--because functional accounts include any costs which are used in the normal preparation of a company's operating statement.

Accepted Answer

Advertising is a functional cost account because it is a cost that is incurred in the normal course of a company's operations and is used in the preparation of the company's operating statement.

Question 5

Starbucks ran a full-page ad in THE WALL STREET JOURNAL proclaiming that its baristas can make more than 87,000 possible combinations of an espresso coffee drink. This is an example of:
A) Combined target market approach
B) Mass customization
C) Task transfer
D) Diversification strategy
E) Single target market approach

Accepted Answer

The statement of Starbucks about its baristas being able to create more than 87,000 possible combinations of an espresso coffee drink is an example of mass customization. This is a marketing strategy that allows companies to personalize their products and services to meet the unique needs and preferences of individual customers, while still keeping costs low. In this case, Starbucks is using the idea of customization to appeal to consumers who want more options and control over their coffee orders.

Question 6

_____ are the categories to which various costs are charged in the normal financial accounting cycle.
A) Natural accounts
B) Live accounts
C) Functional accounts
D) Defined accounts
E) Normal accounts

Accepted Answer

Natural accounts are the categories to which various costs are charged in the normal financial accounting cycle. These accounts are called "natural" because they represent the natural divisions of the business's financial activities, such as assets, liabilities, revenues, and expenses. Examples of natural accounts include accounts receivable, accounts payable, salaries and wages, and rent expense.

Question 7

Regarding marketing cost analysis:
A) there is only one right way to allocate functional costs.
B) traditional accounting analysis doesn't analyze the purpose of marketing costs.
C) marketing costs usually should be allocated to general overhead.
D) functional accounts and natural accounts usually have the same names.
E) All of the above are true.

Accepted Answer

Traditional accounting analysis may focus on allocating costs based on department or function, but it may not thoroughly analyze the purpose of marketing costs. This can lead to incomplete or inaccurate cost analysis. The other options provided are not entirely accurate.

Question 8

Classifying marketing costs in terms of their purpose--why the money was spent--requires the use of:
A) iceberg accounts.
B) marketing audit accounts.
C) expense accounts.
D) functional accounts.
E) natural accounts.

Accepted Answer

Functional accounts are used to classify marketing costs based on their purpose, indicating why the money was spent. This classification helps in understanding the function each expense serves in the marketing process.

Question 9

As compared to natural accounts, FUNCTIONAL ACCOUNTS:
A) are the accounts to which various costs are charged in the normal accounting cycle.
B) show the purpose for which expenditures are made.
C) include items such as storing, salaries, and taxes.
D) All of the above.
E) Both A and C above.

Accepted Answer

Functional accounts categorize expenditures based on their purpose, such as production, administration, or sales, rather than the nature of the expense itself.

Question 10

Which of the following statements about mass customization is true?
A) Anderson's windows, which an architect can order in just about any combination of size, hardware, and style, is a good example of mass customization for business markets.
B) Mass customization avoids the need for working capital.
C) Mass customization requires a firm to give up segmentation thinking to pursue larger, more heterogeneous markets.
D) The mass-customization approach applies only to services, and they often must be custom produced anyway.
E) Mass customization reduces production costs but it's less likely to meet a customer's needs.

Accepted Answer

The statement about Anderson's windows being a good example of mass customization for business markets is true.

Question 11

At the Comfort Inn Web site, a customer can create an account with his preferences for a smoking or non-smoking room, the type of pillows he likes, early or late check-in and check-out, and his room location. The hotel keeps track of this information and uses it whenever this customer reserves a room in the future. This is an example of:
A) Combined target market approach
B) Diversification
C) Task transfer
D) Mass customization
E) Single target market approach

Accepted Answer

This is an example of mass customization, where the hotel is customizing its services to meet the specific preferences of individual customers. By keeping track of a customer's preferences, the hotel can offer a personalized experience each time the customer returns, leading to greater customer satisfaction and loyalty.

Question 12

Which of the following statements about mass customization is true?
A) Mass customization means that a firm is targeting the mass market but that it tries to customize the design of a product so it is different from what a competitor offers.
B) Mass customization requires a firm to give up segmentation thinking to pursue larger, more heterogeneous markets.
C) The mass-customization approach applies only to services, and they often must be custom produced anyway.
D) ChemStation's industrial detergents, which a business customer can order to fit any special cleaning need, is a good example of mass customization.
E) None of the above is true.

Accepted Answer

Option D is true as it provides a good example of mass customization where a business customer can order industrial detergents to fit any special cleaning need. Option A is incorrect as it refers to differentiation rather than customization. Option B is incorrect as mass customization includes market segmentation. Option C is incorrect as mass customization can apply to both goods and services.

Question 13

In marketing cost analysis, all of the following are considered functional accounts EXCEPT:
A) rent.
B) billing.
C) order assembly.
D) storing.
E) transporting.

Accepted Answer

Functional accounts in marketing cost analysis refer to categories related to specific marketing activities or functions such as billing, order assembly, storing, and transporting. Rent, however, is considered a general overhead cost and not directly tied to a specific marketing function.

Question 14

"Natural accounts" are:
A) usually allocated to functional accounts by the MIS method.
B) accounts to which various costs are charged in the normal accounting cycle.
C) misleading for calculating a firm's total profitability.
D) usually named to show the purpose for which expenditures are made.
E) All of the above.

Accepted Answer

Natural accounts are accounts to which various costs are charged in the normal accounting cycle, reflecting the nature of the expense rather than its function.

Question 15

Accounts such as rent, salaries, taxes and auto expenses are called ______________ accounts.
A) functional
B) general business
C) cost analysis
D) distribution
E) natural

Accepted Answer

Rent, salaries, taxes, and auto expenses are all examples of natural accounts, which are categorized according to the classification of the expense. Natural accounts are used in financial statements to provide more detailed information about where money is being spent, and they are also used in budgeting and forecasting to help businesses plan for future expenses. Functional accounts are used to group expenses by department or function, while general business accounts are used to categorize expenses based on their nature, such as advertising or insurance. Cost analysis accounts are used to analyze the costs of a particular product, service or project, and distribution accounts are used to track the distribution of expenses across different departments or locations.

Question 16

The categories to which various costs are charged in the normal financial accounting cycle are:
A) Natural accounts.
B) Functional accounts.
C) Cash accounts.
D) Expense accounts.
E) None of the above.

Accepted Answer

The categories to which various costs are charged in the normal financial accounting cycle are referred to as natural accounts. These are accounts that are used to track and classify financial transactions based on their nature or type. Examples include asset accounts, liability accounts, revenue accounts, and expense accounts. Functional accounts, cash accounts, and expense accounts are not the primary categories used in financial accounting.

Question 17

A major purpose of marketing cost analysis is to:
A) determine which costs are fixed and which are variable.
B) avoid the pitfalls of the full-cost approach to allocating costs.
C) divide costs into natural accounts.
D) show the marketing manager where costs occur in relation to serving particular customers.
E) avoid the pitfalls of the contribution-margin approach to allocating costs.

Accepted Answer

The major purpose of marketing cost analysis is to show the marketing manager where costs occur in relation to serving particular customers. This helps in identifying the most profitable customer segments and designing marketing strategies accordingly. Option A is incorrect as determining fixed and variable costs is a part of cost behavior analysis. Option B and E are incorrect as they focus on avoiding pitfalls of different cost allocation methods rather than the purpose of marketing cost analysis. Option C is incorrect as dividing costs into natural accounts is a part of cost accounting.

Question 18

Marketing cost analysis starts with the assumption that:
A) "natural accounts" are more useful than "functional accounts."
B) marketing expenditures are made for a specific purpose--and so it makes sense to allocate costs to different market segments, customers, or products.
C) all marketing expenditures should be treated as overhead expenses.
D) overall profit is what counts--so it isn't critical if some market segments, products, or customers are unprofitable.
E) All of the above.

Accepted Answer

Marketing cost analysis assumes that marketing expenditures are made for a specific purpose and it makes sense to allocate costs to different market segments, customers, or products. This allows businesses to determine which segments, customers, or products are profitable and which are not, and to make informed decisions about where to allocate resources. The other options are not accurate assumptions for marketing cost analysis.

Question 19

Which of the following statements regarding marketing cost analysis is FALSE?
A) Functional accounts include items such as salaries, wages, supplies, raw materials, and advertising.
B) The costs allocated to the functional accounts will be equal in total to those in the natural accounts.
C) Functional accounts can be used to show the profitability of territories, products, customers, sales representatives, and so on.
D) Cost analysis is not performance analysis.
E) Traditional accounting methods do not show the purpose for which marketing expenditures are made.

Accepted Answer

The answer of Which of the following statements regarding marketing...

Question 20

Marketing cost analysis:
A) just uses the same "natural" accounting categories commonly used for financial analysis.
B) allocates costs to products or customers to focus on the purpose for which marketing money is spent.
C) is not very accurate, since it is almost impossible to link marketing costs to specific sales.
D) is done more frequently than analysis of manufacturing costs.
E) None of the above is true.

Accepted Answer

Marketing cost analysis allocates costs to products or customers to focus on the purpose for which marketing money is spent, which means it is not just using the same "natural" accounting categories commonly used for financial analysis. It also attempts to link marketing costs to specific sales, so it has higher accuracy than stated in option C. Option D lacks any explanation, making it difficult to determine its accuracy. Option E, as it is negating all the statements, cannot be entirely true. Therefore, B is the best choice with the explanation.

Quiz 20: Managing Marketings Link With Other Functional Areas

In marketing cost analyis, all of the following are considered natural accounts EXCEPT:

In the factory, _____ show the purpose for which expenditures are made.

At Dell's Web site, a student can order a laptop computer with the exact memory capability and software that she wants, and have it shipped to her dorm room within 48 hours. This is an example of:

Which of the following is an example of a FUNCTIONAL cost account?

Starbucks ran a full-page ad in THE WALL STREET JOURNAL proclaiming that its baristas can make more than 87,000 possible combinations of an espresso coffee drink. This is an example of:

_____ are the categories to which various costs are charged in the normal financial accounting cycle.

Regarding marketing cost analysis:

Classifying marketing costs in terms of their purpose--why the money was spent--requires the use of:

As compared to natural accounts, FUNCTIONAL ACCOUNTS:

Which of the following statements about mass customization is true?

Which of the following statements about mass customization is true?

In marketing cost analysis, all of the following are considered functional accounts EXCEPT:

"Natural accounts" are:

Accounts such as rent, salaries, taxes and auto expenses are called ______________ accounts.

The categories to which various costs are charged in the normal financial accounting cycle are:

A major purpose of marketing cost analysis is to:

Marketing cost analysis starts with the assumption that:

Which of the following statements regarding marketing cost analysis is FALSE?

Marketing cost analysis: