Which of the Following Is the Best Reason for Using

question 13

Multiple Choice

Which of the following is the best reason for using the contribution-margin approach in a marketing cost analysis by product line?

• A)The net profit of each product line is what we are trying to determine.
• B)Full allocation of all costs is the best accounting practice.
• C)To go beyond allocation of measurable costs is to allocate indirect costs on an arbitrary basis.
• D)When analyzing marketing costs by products,all such costs are indirect.
• E)In the long run all costs must be covered.

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Definitions:

Vacation Pay

Compensation employees receive for their time off work, as determined by their employment contracts or company policies.

Defined Contribution Pension Plan

A retirement plan where the employer, employee, or both make contributions, and the final benefits depend on the investment's performance.

Salaries

Payments made to employees for their labor or services over a period.

Social Security Tax

Definition: Taxes collected by governments to fund social security programs, typically levied on both employers and employees.