3 the pricing waterfall a charts the multiple sources of revenue by customer b chart 4312106

3 the pricing waterfall a charts the multiple sources of revenue by customer b chart 4312106

3) The pricing waterfall:

A) charts the multiple sources of revenue by customer.

B) charts multiple list prices offered to different customers.

C) charts the multiple revenue leaks from list price caused by allowances and discounts.

D) charts multiple types of customer costs.

4) Which of the following is NOT part of the pricing waterfall chart?

A) dealer list price

B) customer discount price

C) invoice price

D) actual net price

5) Customers that require a low price and lots of customized service are:

A) high cost to serve and low margin.

B) low cost to serve and low margin.

C) high cost to serve and high margin.

D) low cost to serve and high margin.

6) Customers are price sensitive with few special demands are:

A) high cost to serve and low margin.

B) low cost to serve and low margin.

C) high cost to serve and high margin.

D) low cost to serve and high margin.

7) Typical sales person's compensation:

A) is paid in the form of salary.

B) encourages sales only to profitable customers.

C) is usually based on customer profit.

D) is usually based on sales revenue.

8) Bealing Company has the following operating profit:

Sales $400,000

Variable Costs 160,000

Contribution Margin $240,000

Fixed Costs 140,000

Operating Profit $100,000

a. Bealing could increase revenues by 10% by reducing sales discounts by 10%. There will be no changes in variable or fixed costs. What would be the percentage increase in operating profits?

b. Refer to the original information in this problem. Suppose Bealing's sales people discounted sales another 2% with no change in variable or fixed costs. What is the change in operating profits?

9) Describe the pricing waterfall.

1

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