With the "contribution-margin approach" to marketing cost analysis,
A) all costs are allocated to products, customers, or other categories.
B) fixed costs are allocated based on the profit contribution to the firm.
C) variable costs are treated as common costs.
D) common costs which are hard to allocate are ignored.
E) None of the above is true.

Question

Quizplus · Accepted Answer

The contribution-margin approach focuses on variable costs and ignores common costs that are difficult to allocate, emphasizing the contribution margin for decision-making.

With the "Contribution-Margin Approach" to Marketing Cost Analysis