Under Which Conditions Is It No Longer Worthwhile to Keep

question 16

Multiple Choice

Under which conditions is it no longer worthwhile to keep a customer?

• A)The account is no longer profitable.
• B)Customers are abusive to the point where it lowers employee morale.
• C)Contract conditions are no longer being met.
• D)Customer demands are beyond reasonable.
• E)All of these apply.

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Definitions:

Milling Machine Minutes

These represent the time a milling machine is in operation, often used as a basis for allocating manufacturing overhead costs.

Monthly Demand

The sum amount of a product or service that purchasers are ready and can afford to buy over the course of a month.

Variable Manufacturing Overhead

The portion of manufacturing overhead costs that changes in proportion to the level of production activity.

Fixed Manufacturing Overhead

Costs related to the production that remain constant regardless of the level of manufacturing activity, such as building lease payments or salaries of permanent staff.