To Be Considered as Strategic, an Account Should Be Both

question 103

Multiple Choice

To be considered as strategic, an account should be both ________ and ________.

• A) high in volume sales, high in total dollar sales
• B) large, buy large amounts of one product
• C) complex, small
• D) profitable, large
• E) large, complex

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Definitions:

Variable Costing

An accounting method that only includes variable production costs (materials, labor, and overhead) in product costs, excluding fixed overhead.

Direct Labor

Direct labor comprises the labor costs of workers directly involved in the production of goods or services.

Absorption Costing

A costing method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a unit of product.

Fixed Manufacturing Overhead

Ongoing expenses that do not change in total with the level of production or sales volume, such as salaries, rent, and insurance, associated specifically with the manufacturing process.