The main difference between the full-cost approach and the contribution-margin approach to marketing cost analysis is:
A) The contribution-margin approach uses both mechanical and logical reasoning to allocate marketing costs.
B) The full-cost approach allocates all costs-even fixed costs-to products, customers, or other categories.
C) The contribution-margin approach allocates all costs to show how profitable various customers are.
D) The full-cost approach focuses on variable costs rather than total costs.

Question

Quizplus · Accepted Answer

The main difference between the full-cost approach and the contribution-margin approach is that the full-cost approach allocates all costs, including fixed costs, to products, customers, or other categories, while the contribution-margin approach only allocates variable costs to show how profitable various customers are. The full-cost approach provides a more comprehensive view of the costs associated with a product or customer, while the contribution-margin approach focuses solely on the costs that are directly related to a customer's contribution to profits.

The Main Difference Between the Full-Cost Approach and the Contribution-Margin