If a Firm Spent $5,000 in Advertising to Obtain 50

question 130

True/False

If a firm spent $5,000 in advertising to obtain 50 new customers,its acquisition cost would be $100 per customer.

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Definitions:

Activity

Any action or operation within a business or process.

Committed Fixed Costs

Long-term fixed costs that an organization has committed to, which are not easily changed, such as lease payments or insurance costs.

Short Term

Referring to a time frame typically less than one year, often relating to immediate goals, financial obligations, or investments.

Variable Cost

Costs that change in proportion with the level of production or business activity, such as materials and labor directly involved in production.