A PRIMARY reason for assigning selling and distribution costs to products and customers for analytical purposes is:
A)to justify a varied product mix.
B)that controllers are required to assign all costs when valuing inventories.
C)that different products, and customers require different quantities of selling and distribution activities.
D)that all indirect costs must be assigned.

Question

Quizplus · Accepted Answer

Different products and customers require varying levels of selling and distribution costs due to differences in marketing strategies, demand, sales volume, and other factors. By assigning these costs, companies can evaluate the profitability of their products and customers, identify areas for cost reduction or optimization, and make informed decisions about pricing, product mix, and resource allocation. Assigning selling and distribution costs also helps companies to evaluate the effectiveness of their sales and marketing efforts, assess customer satisfaction and loyalty, and develop targeted marketing campaigns to improve performance. A and B are incorrect as they do not accurately reflect the primary reason for assigning selling and distribution costs. D is incorrect as not all indirect costs need to be assigned for analytical purposes.

A PRIMARY Reason for Assigning Selling and Distribution Costs to Products