Regarding the "contribution-margin approach" to marketing cost analysis, which of the following statements is TRUE?
A) The total net profit obtained with this approach is different from that obtained using the "full-cost approach."
B) It is concerned with the amount contributed by a product or customer toward covering variable costs--after fixed costs have been covered.
C) This approach stresses the need for evaluating fixed costs.
D) This approach may suggest a different action than the "full-cost approach."
E) All of the above are true.

Question

Quizplus · Accepted Answer

The contribution-margin approach focuses on the contribution margin, which is the difference between sales and variable costs. It may suggest different actions than the full-cost approach, which allocates fixed costs to products.

Regarding the "Contribution-Margin Approach" to Marketing Cost Analysis, Which of the Following