A Lower CPA Does Not Necessarily Indicate Higher Profit

question 98

Multiple Choice

A lower CPA does not necessarily indicate higher profit. Why?

• A) A lower CPA may be due to changes in network distribution.
• B) A lower CPA may also have lower sales volume, reducing overall profit.
• C) A lower CPA may be due to changes in CPC bidding.
• D) A lower CPA may be due to additions in negative Keywords.

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Definitions:

Dual Rate System

A method of cost allocation where costs are divided into fixed and variable categories, with each being allocated differently.

Variable Overhead Rate

A measure used to estimate the variable costs that a business incurs during the production of a good or service.

Direct Labor Hours

The amount of time spent by workers directly involved in manufacturing a product.

Direct Materials

Raw materials that can be directly linked to the production of specific goods or services in a manufacturing process.