The allocation of corporate-sustaining costs is useful for

ACCOUNTING

Multiple Choice

The allocation of corporate-sustaining costs is useful for

a. evaluating the performance of salespersons with individual customer accounts.

b. motivating distribution-channel management.

c. focusing on the cause-and-effect relationships with the cost-allocation bases.

d. none of the above.

Click here for the SOLUTION

Corporate-sustaining costs

ACCOUNTING

Multiple Choice

Corporate-sustaining costs

a. are common to all individual customers.

b. have a clear cause-and-effect relationship with several cost-allocation bases.

c. should be allocated for decisions regarding reducing customer costs.

d. apply to all of the above.

Click here for the SOLUTION

To reduce distribution-channel costs, a company could

ACCOUNTING

Multiple Choice

To reduce distribution-channel costs, a company could

a. improve the efficiency of the ordering process.

b. make fewer customer visits.

c. eliminate distribution to retailers and only service wholesalers.

d. do any of the above.

Click here for the SOLUTION

Customer actions will LEAST affect

ACCOUNTING

Multiple Choice

Customer actions will LEAST affect

a. customer output unit-level costs.

b. customer batch-level costs.

c. customer-sustaining costs.

d. distribution-channel costs.

Click here for the SOLUTION

An advantage of using a bar chart to visualize customer profitability is that

ACCOUNTING

Multiple Choice

An advantage of using a bar chart to visualize customer profitability is that

a. differences in commissions paid to sales persons stand out.

b. loss customers stand out.

c. trends in the volume of purchases become apparent.

d. all of the above are advantages.

Click here for the SOLUTION

_______________ categorizes costs related to customers into different cost pools on the basis of either different classes of cost drivers or different

ACCOUNTING

Multiple Choice

_______________ categorizes costs related to customers into different cost pools on the basis of either different classes of cost drivers or different degrees of difficulty in determining the cause-and-effect (or benefits-received) relationships.

a. Customer-profitability analysis

b. Customer revenues

c. Customer cost hierarchy

d. Price discounting

Click here for the SOLUTION

Costs incurred to handle each unit sold would MOST likely be classified as

ACCOUNTING

Multiple Choice

Costs incurred to handle each unit sold would MOST likely be classified as

a. a customer output unit-level cost.

b. a customer batch-level cost.

c. a customer-sustaining cost.

d. a corporate-sustaining cost.

Click here for the SOLUTION