When the "Full-Cost Approach" to Marketing Cost Analysis Is Used

question 86

Multiple Choice

When the "full-cost approach" to marketing cost analysis is used, allocating fixed costs on the basis of sales:

• A) may make low-volume customers appear more profitable than they are.
• B) increases each customer's contribution margin.
• C) decreases the profitability of the whole business.
• D) makes large-volume customers appear more profitable that they are.
• E) increases the profitability of the whole business.

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Definitions:

Rights

Rights refer to the moral or legal entitlements to have or do something, recognized in society as fundamental to human welfare or justice.

Ethical

Pertaining to or dealing with morals, principles of morality and judgments of right and wrong behavior.

Welfare

relates to the health, prosperity, and happiness of individuals or communities, often considered in the context of social support and services.

Normalization

The process of making something conform to a standard or a typical state or condition.