In marketing cost analysis by territories, the contribution-margin approach:
A) is a reasonably good method for allocating fixed costs among territories.
B) allocates all costs among the various territories.
C) calls management's attention to how much a territory is contributing to overhead expenses.
D) is a good approach to use when deciding whether to expand the production facilities in a particular territory.
E) enables managers to determine the net profit of each territory being studied.

Question

Quizplus · Accepted Answer

The contribution-margin approach highlights how much each territory contributes to covering fixed costs and overhead, helping management focus on profitability and resource allocation.

In Marketing Cost Analysis by Territories, the Contribution-Margin Approach