Contribution-margin advocates argue that:
A) Costs should be distinguished according to where they are incurred
B) All revenues should be reduced by all fixed and variable costs accrued by the segments earning that revenue
C) It is misleading to allocate costs arbitrarily
D) There is no such thing as arbitrary cost allocation
E) The full-cost approach cannot be used to determine the profitability of a product, territory, or customer

Question

Quizplus · Accepted Answer

Contribution-margin advocates argue that it is misleading to allocate costs arbitrarily because it can distort the true profitability of different segments.

Contribution-Margin Advocates Argue That