The "contribution-margin approach" to marketing cost analysis:
A) considers only those costs which are directly related to particular alternatives.
B) is especially useful for estimating the long-run profit of a proposed strategy.
C) allocates variable costs which are hard to measure to overhead.
D) is especially useful for determining if there should be more controls on fixed costs.
E) All of the above.

Question

Quizplus · Accepted Answer

The contribution-margin approach only considers those costs that are directly related to particular alternatives, such as variable costs. It does not allocate any indirect or overhead costs, as those are considered fixed costs. This approach is not specifically focused on long-run profit or determining if there should be more controls on fixed costs.

The "Contribution-Margin Approach" to Marketing Cost Analysis