Regarding Marketing Cost Analysis, Which of the Following Statements Is

question 110

Multiple Choice

Regarding marketing cost analysis, which of the following statements is TRUE?

• A) Natural accounts are set up to indicate the purpose for which the expenditures were made.
• B) The contribution-margin approach focuses attention on all costs equally.
• C) The first step is to reclassify all costs in the natural accounts into functional accounts.
• D) The total of costs in the natural accounts will often differ from the total of those in the functional accounts.
• E) All of the above are true.

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Definitions:

Joint Costs

Costs that are incurred in the process of producing two or more products simultaneously and cannot be directly assigned to a particular product.

Allocation

The process of distributing resources, costs, or revenues among various accounts, departments, or products based on specific criteria.

Indirect Salaries

Salaries for employees who do not directly work on the production of products or services but support those who do.

Basis of Sales

The underlying foundation or principle for recognizing revenue from sales transactions in accounting records.