125) It costs a company $6 to manufacture a product. It sells the product for $10 to a wholesaler
who in turn sells it to a retailer for $12. A customer of the retailer buys it for $24. What was the
markup on selling price for each member of this product’s channel of distribution?
A) Manufacturer’s markup = 40 percent; wholesaler’s markup = 16.67 percent; retailer’s markup
= 50 percent
B) Manufacturer’s markup = 48 percent; wholesaler’s markup = 18 percent; retailer’s markup =
45 percent
C) Manufacturer’s markup = 60 percent; wholesaler’s markup = 20 percent; retailer’s markup =
100 percent
D) Manufacturer’s markup = 66.67 percent; wholesaler’s markup = 20 percent; retailer’s markup
= 100 percent
E) Manufacturer’s markup = 60 percent; wholesaler’s markup = 23 percent; retailer’s markup =
40 percent
126) ________ is the additional sum of money expected from an investment over and above the
original investment.
A) Return on sale
B) Net sale
C) Return allowance
D) Return on investment
E) Contribution margin
127) “Yo-to-go” is an entrepreneurial venture of a college student named Cathy Frank. She sells
yogurts in cups and cones from a trailer at the beach during the tourist season. If Frank pays
$500 for cartons of yogurts then sells it all for $1200, how much is her return on investment?
A) $500
B) $700
C) $1200
D) $1700
E) $1900
128) A value analysis is defined as a:
A) listing of those products with the highest prices.
B) determination of the best product for the money.
C) listing of those products with the lowest prices.
D) way to save costs while using cheaper products.
E) way to save costs while using high-end products.
129) There are numerous types of value analyses that a salesperson can develop for a prospect.
One type that is frequently used is the:
A) retail cost versus wholesale cost.
B) average markup.
C) product cost versus true value.
D) selling cost versus selling price.
E) net profit.
130) Cadwell, Inc., a regional business computer sales firm is attempting to sell a convenience
store chain, Gas ‘N’ Go, a new computer-operated pump meter. Terry Williams, owner of the
convenience stores, seems interested in Cadwell’s initial proposal but believes the price may be
too high. The cost per computer is $1,000, but Cadwell could sell Williams 50 computers for
$45,000 with terms of the sale being 2/10 net 30. Williams purchases 50 computers and pays for
them five days after the purchase, so his ________ is $882.
A) cash discount
B) unit cost
C) gross profit
D) trade discount
E) breakeven cost
131) What is sales training? How long is the training period for the typical salesperson?
132) How does the typical salesperson obtain the knowledge needed to become a successful
salesperson?
133) List four reasons why it is important for a salesperson to have sales knowledge of his
company, his buyer, and his market.
134) What is the difference between trade and industrial advertising?
135) Distinguish between consumer sales promotions and trade sales promotions.
136) Distinguish between shelf positioning and shelf facings.
137) How can a geographic information system (GIS) make a salesperson more efficient?
138) How does a virtual office benefit a salesperson?
139) Briefly describe what is the Internet and the cloud?
140) List three important guidelines for cell phone usage.
141) Distinguish between FOB shipping point and FOB destination.
142) Distinguish between gross profit and net profit.
143) It costs Custom Design, Inc., $10 to make a brass and copper candleholder. It sells the
candleholder to a wholesaler for $16. The wholesaler sells the candleholder to a gift shop for
$20. The gift shop prices the candleholder at $45. What was the markup on selling price for each
member of this product’s channel of distribution?
144) What kind of advertising would be found in Florist, a magazine with a mission “to inform,
inspire, and educate retail florists”?
145) What is the main obstacle faced by a hair product salesperson who is trying to convince a
retailer to give a new shampoo good shelf positioning?
146) Which technology aid commonly used by salespeople can be described as an electronic
collection of business cards?
147) What is netiquette?
148) Is it good netiquette for an e-mail user to use flaming when communicating with
customers? Briefly explain your answer.
149) What are the four types of discounts that buyers typically receive?
150) When Rupert’s Sandwich Shop received an invoice from Cozzini for $2,550 worth of
boneless hams and turkey breasts, it included the following phrase: 1/10 net 30. If the meat was
purchased on September 17 and the shop owner wants to pay the bill on September 30, how
much should the owner make the check out for?
151) A salesperson can develop numerous types of value analyses for a prospective buyer. List
three types of frequently used value analyses.
152) Clearwater Hampers is a small British company that sells luxury food and drink in various
combinations in picnic hampers. Food and wine are seen as classic, fail-safe gifts in a market
where gift-giving is increasingly tricky. Corporate customers, both in the United Kingdom and
abroad, are important to the business. The firm’s products are also available in a number of retail
establishments around the world. The leading salesperson for Clearwater Hampers is Peter
Austin who has been with the company since it began operation in 1979. The firm’s owners were
originally trout farmers who needed a source of income during the winter months and who
diversified into selling fine liquors, cheeses, chocolates, and other luxury food items. The
company uses a variety of promotions to make prospects aware of the company’s products.
A Clearwater Hampers ad in magazines targeted to retail store managers would be an example
of:
A) retail advertising.
B) national advertising.
C) exclusive promotion.
D) intensive promotion.
E) trade advertising.
153) Clearwater Hampers is a small British company that sells luxury food and drink in various
combinations in picnic hampers. Food and wine are seen as classic, fail-safe gifts in a market
where gift-giving is increasingly tricky. Corporate customers, both in the United Kingdom and
abroad, are important to the business. The firm’s products are also available in a number of retail
establishments around the world. The leading salesperson for Clearwater Hampers is Peter
Austin who has been with the company since it began operation in 1979. The firm’s owners were
originally trout farmers who needed a source of income during the winter months and who
diversified into selling fine liquors, cheeses, chocolates, and other luxury food items. The
company uses a variety of promotions to make prospects aware of the company’s products.
Clearwater Hampers spends money on advertising for all of the following reasons EXCEPT to:
A) increase overall sales.
B) inform prospects that a product is on the market.
C) develop leads for Austin and the rest of its sales force.
D) create cognitive dissonance about recent purchases.
E) educate customers about the company’s picnic hampers.
154) Clearwater Hampers is a small British company that sells luxury food and drink in various
combinations in picnic hampers. Food and wine are seen as classic, fail-safe gifts in a market
where gift-giving is increasingly tricky. Corporate customers, both in the United Kingdom and
abroad, are important to the business. The firm’s products are also available in a number of retail
establishments around the world. The leading salesperson for Clearwater Hampers is Peter
Austin who has been with the company since it began operation in 1979. The firm’s owners were
originally trout farmers who needed a source of income during the winter months and who
diversified into selling fine liquors, cheeses, chocolates, and other luxury food items. The
company uses a variety of promotions to make prospects aware of the company’s products.
As Austin sells Clearwater Hampers, he can use his Tablet to do all of the following EXCEPT:
A) initiate trial closes.
B) generate expense reports.
C) check a shipment status.
D) track customer buying patterns.
E) create sales presentations.
155) Clearwater Hampers is a small British company that sells luxury food and drink in various
combinations in picnic hampers. Food and wine are seen as classic, fail-safe gifts in a market
where gift-giving is increasingly tricky. Corporate customers, both in the United Kingdom and
abroad, are important to the business. The firm’s products are also available in a number of retail
establishments around the world. The leading salesperson for Clearwater Hampers is Peter
Austin who has been with the company since it began operation in 1979. The firm’s owners were
originally trout farmers who needed a source of income during the winter months and who
diversified into selling fine liquors, cheeses, chocolates, and other luxury food items. The
company uses a variety of promotions to make prospects aware of the company’s products.
Corporate buyers typically pay for the shipment of hampers to their various recipients, and
retailers pay shipping costs for hampers shipped to stores from Clearwater Hampers. In other
words, Clearwater Hampers uses:
A) net pricing.
B) FOB shipping point pricing.
C) uniform pricing.
D) zone shipment pricing.
E) FOB destination pricing.
156) Clearwater Hampers is a small British company that sells luxury food and drink in various
combinations in picnic hampers. Food and wine are seen as classic, fail-safe gifts in a market
where gift-giving is increasingly tricky. Corporate customers, both in the United Kingdom and
abroad, are important to the business. The firm’s products are also available in a number of retail
establishments around the world. The leading salesperson for Clearwater Hampers is Peter
Austin who has been with the company since it began operation in 1979. The firm’s owners were
originally trout farmers who needed a source of income during the winter months and who
diversified into selling fine liquors, cheeses, chocolates, and other luxury food items. The
company uses a variety of promotions to make prospects aware of the company’s products.
A New York-based retailer purchases picnic hampers for $75,000 on November 1 and is given a
cash discount of 3/10 net 30. If the invoice is paid on November 6, the retailer will:
A) pay $75,000.
B) receive a trade discount of $2,250.
C) receive a quantity discount of $1,500.
D) receive a cash discount of $2,250.
E) pay $75,000 plus a penalty charge of $2,250.