If One Were Using the "Full-Cost" Approach to Marketing Cost

question 90

Multiple Choice

If one were using the "full-cost" approach to marketing cost analysis, then allocating fixed costs on the basis of sales volume would:

• A) make some customers appear more profitable than they actually are.
• B) not be done-because only variable costs would be analyzed.
• C) make some products appear less profitable than they actually are.
• D) decrease the profitability of the whole business.
• E) Both make some customers appear more profitable than they actually are and make some products appear less profitable than they actually are are true statements.

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Definitions:

Stimulus

Anything that can provoke a response in an organism or part of the body.

Pleural Cavity

The thin fluid-filled space between the two pulmonary pleurae (visceral and parietal) of each lung, involved in respiratory mechanics.

Thoracic Cavity

The body cavity located in the chest, containing the lungs, heart, and other thoracic organs.

Pericardial Cavity

The potential space between the parietal and visceral layers of the pericardium, containing a small amount of lubricating fluid.