Regarding Marketing Cost Analysis

question 122

Multiple Choice

Regarding marketing cost analysis,

• A) the full-cost approach usually should be used as there are almost always some fixed costs to be allocated.
• B) the contribution-margin approach focuses attention on variable costs.
• C) fixed costs should be allocated according to the contribution-margin approach.
• D) the action implications will be the same whether the full-cost or contribution-margin approach is used.
• E) the contribution-margin approach provides the most complete allocation of total expenses.

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Definitions:

Total Assets

The sum of all current and non-current assets owned by a business, indicating its total resources.

Cost Per Unit

The total expense incurred in manufacturing or acquiring a product divided by the number of units.

Purchased

Acquired in exchange for money or its equivalent; obtaining ownership of a good or service.

Days' Sales

A financial ratio that measures the average time it takes a company to convert its inventory into sales.