Which of the Following Is a Reason to Gather Data

question 132

Multiple Choice

Which of the following is a reason to gather data, associate revenues with each customer and develop a system of allocating costs to each customer?

• A) GAAP requirements for external reporting including 10K disclosures
• B) to assure that highly profitable customers get the appropriate level of care and attention
• C) ABC systems cannot be implemented without customer-profitability reporting
• D) to assure that more resources are committed to loss-making customers in an attempt to retain all customers

Understand the concept of value consciousness among consumers.

Recognize how external economic forces like inflation and recession affect the overall economy and individual financial decisions.

Identify changes in consumer income levels and their impact on spending habits.

Understand the concept of discretionary income and its calculation.

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Definitions:

Return On Assets Ratio

A financial metric measuring how efficiently a company generates profit from its assets, calculated as net income divided by total assets.

Return On Common Shareholders' Equity Ratio

A financial metric that measures the profitability attributable to shareholders by comparing net income to common equity.

Debt To Total Assets Ratio

A financial ratio that measures the percentage of a company's assets financed by creditors through debt, indicating financial leverage.

Leverage

The use of borrowed funds to increase the potential return of an investment.