Which of the following is a reason to gather data, associate revenues with each customer and develop a system of allocating costs to each customer?
A) GAAP requirements for external reporting including 10K disclosures
B) to assure that highly profitable customers get the appropriate level of care and attention
C) ABC systems cannot be implemented without customer-profitability reporting
D) to assure that more resources are committed to loss-making customers in an attempt to retain all customers

Question

Quizplus · Accepted Answer

Gathering data, associating revenues with each customer, and allocating costs to each customer allows for customer-profitability reporting, which helps ensure that highly profitable customers receive appropriate care and attention. This information also enables companies to identify and focus on retaining profitable customers while potentially phasing out loss-making customers. It is not necessarily required for GAAP reporting or implementation of ABC systems.

Which of the Following Is a Reason to Gather Data