The "contribution-margin approach" to marketing cost analysis:
A) Focuses attention on the allocation of fixed costs.
B) Is mainly concerned with the allocation of variable costs.
C) Always leads to the same conclusions as the "full-cost approach."
D) Is always preferred to the "full-cost approach."
E) None of the above.

Question

Quizplus · Accepted Answer

The "contribution-margin approach" to marketing cost analysis is mainly concerned with the allocation of variable costs. It focuses on the contribution margin (sales revenue minus variable costs) of each product or service, rather than allocating fixed costs. This approach can provide a more accurate picture of the profitability of each individual product or service.

The "Contribution-Margin Approach" to Marketing Cost Analysis