Question

The net marketing contribution for a firm is the firm's ________.

A) gross profit - (marketing and sales expenses)
B) profits - (other operating expenses)
C) profits
D) (all revenues) - (all expenses)
E) (sales revenues) - (cost of goods sold)

Answer 1

The net marketing contribution for a firm is the firm's gross profit minus the marketing and sales expenses. It helps measure the profitability of a firm's marketing activities. Option a.

Step-by-step explanation:

The net marketing contribution for a firm is the firm's gross profit minus the marketing and sales expenses option a. This calculation is essential in understanding the effectiveness of a firm's marketing efforts in relation to the revenue they generates. The formula for calculating this is:

Net Marketing Contribution = Sales Revenues - (Cost of Goods Sold + Marketing and Sales Expenses).

For instance, if a firm has total revenues from selling some products at a certain price (Total Revenue = Price x Quantity), the cost of goods sold and the expenses related to marketing and sales are subtracted from this revenue to determine the net marketing contribution. It is different from accounting profit, which is total revenues minus explicit costs including depreciation, and economic profit, which subtracts both explicit and implicit costs from total revenues.