The "Contribution Margin Approach" to Marketing Cost Analysis

question 46

Multiple Choice

The "contribution margin approach" to marketing cost analysis:

• A) allocates all costs to products or customers.
• B) should always be used instead of the full-cost approach--so that fixed costs are fully considered.
• C) focuses management's attention on variable costs rather than total costs.
• D) assumes that all costs must be allocated.
• E) None of the above.

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Definitions:

Rescission

The legal process of canceling, terminating, or reversing a contract, returning all parties to their positions prior to the agreement.

Contract

A legally binding agreement between two or more parties that creates mutual obligations enforceable by law.

Remedies

Legal means used to enforce a right or redress a harm, including monetary damages and injunctions.

Misrepresented

Incorrectly or falsely presented information, often leading to a misunderstanding or an erroneous basis for a contract or agreement.