Many Firms Prefer to Distribute Directly to the Final Customer

question 163

Multiple Choice

Many firms prefer to distribute directly to the final customer or consumer because they

• A) want to control the whole marketing job.
• B) believe they can serve target customers at a lower cost.
• C) think they can do the work more effectively than intermediaries.
• D) can use the Internet to make direct distribution easier.
• E) All of these are reasons why firms prefer direct distribution.

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Definitions:

Activity Pools

Groups of related activities in activity-based costing that accumulate costs to be allocated to cost objects.

Activity-Based Cost

A costing method that assigns overhead and indirect costs to specific activities, providing a more accurate reflection of the costs associated with producing specific products or services.

Indirect Labor

Costs associated with employees who do not directly produce goods but whose services are necessary for the manufacturing process.

Activity Pools

These refer to groups of related tasks or activities in a business that consume resources and are used in activity-based costing for assigning costs to products or services.