In General,it Costs ________ Times More to Replace a Customer

question 59

Multiple Choice

In general,it costs ________ times more to replace a customer than it costs to keep a customer.

• A)two
• B)three
• C)four
• D)five
• E)six

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Definitions:

Cost Distortion

An inaccurate allocation of costs to products, often resulting from traditional costing methods that can overstate or understate the true costs of goods.

Activity-based Costing Systems

A method in accounting that assigns costs to products or services based on the activities that go into producing them, aiming to provide more accurate costing.

Production Runs

The process of manufacturing a certain quantity of products at one time, often measured as a batch or lot.

Traditional Costing

An accounting method that allocates overhead costs to products based on a predetermined rate, often linked to production volume.