Segmentation Is the Process a Manager Goes Through to Decide

question 7

True/False

Segmentation is the process a manager goes through to decide which subgroups of customers to select.

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Definitions:

Direct Labor Cost

The expense associated with employees who physically convert raw materials into the company's products; considered a variable cost.

Absorption Costing

A method of inventory costing that includes all manufacturing costs, both variable and fixed, in the cost of a product.

Variable Costing

An accounting method that only considers variable costs in determining the cost of goods sold and in calculating contribution margin.

Unit Product Cost

The total expense incurred to produce, store, and sell one unit of a product, including direct materials, direct labor, and manufacturing overhead.