Reichheld and Sasser (1990) Have Suggested That Annual Profits Per

question 69

Multiple Choice

Reichheld and Sasser (1990) have suggested that annual profits per customer increase every year over seven years because of various factors.Which of the following is NOT one of the factors that they discovered created incremental profits?

• A)Increased sales through price discounts to customers
• B)Profit from referrals to other customers
• C)Opportunities to cross-sell other services
• D)Profit from increased purchases
• E)Profit from reduced operating costs

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Definitions:

Spreadsheet

A digital tool that allows for the arrangement of data in rows and columns to facilitate calculation, analysis, and storage of information.

Labor Intensive

Describes a process or industry that requires a large amount of human labor to produce its goods or services.

Machine Intensive

Describes a production process or industry that relies heavily on machinery and equipment for manufacturing goods, typically resulting in higher fixed costs.

Predetermined Overhead Rates

Predetermined overhead rates involve estimating indirect manufacturing costs and applying them to specific jobs or departments based on a consistent allocation base, facilitating more accurate product costing.