Unlike Traditional Marketers,the Profitability of Direct Marketers Is Highly Sensitive

question 14

Multiple Choice

Unlike traditional marketers,the profitability of direct marketers is highly sensitive to which types of expenses?

• A) rental costs
• B) postage and paper stock costs
• C) energy costs
• D) fringe benefit expenses

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Definitions:

Activity-Based Costing

A methodology that assigns production costs to products based on the activities required to produce them, aiming to provide more accurate product costing.

Unit Product Cost

The total cost incurred to produce, store, and sell one unit of a product, including direct materials, direct labor, and allocated overhead.

Activity Rate

The cost driver rate used in activity-based costing to allocate costs more accurately to products or services based on specific activities.

Activity Cost Pool

A category in activity-based costing that aggregates costs incurred from a specific activity, facilitating the assignment of those costs to products or services based on their use of the activity.