A Customer Cost Hierarchy Categorizes Costs Related to Customers into Different

question 61

Multiple Choice

A customer cost hierarchy categorizes costs related to customers into different cost pools on the basis of different:

• A)types of cost drivers
• B)benefits-received relationships
• C)levels of cause-and-effect relationships
• D)All of these answers are correct.

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Definitions:

Installment Sales Method

An accounting method that recognizes revenue when payments are actually received rather than at the point of sale.

Accrual Method

A bookkeeping approach that registers revenues and costs as they are accrued or realized, irrespective of the timing of the associated cash transactions.

Taxable Income

The amount of income that is subject to income tax after deductions and exemptions.

Corporate Income Tax Rate

The percentage of corporate profits that are paid to the government as income tax.