Knotts Woodproducts Company mills and distributes high-quality hardwoods to furniture manufacturers. Of the items listed below, which should be viewed as a cost traceable to a particular customer and therefore part of a customer profitability analysis?
A) Property taxes on the company's headquarters in Rocky Mount, N.C.
B) Salary of the company's chief financial officer.
C) Order processing and delivery costs.
D) Legal costs associated with corporate tax compliance.

Question

Quizplus · Accepted Answer

Order processing and delivery costs are directly traceable to a particular customer, making them relevant for customer profitability analysis. These costs vary with each customer order and can be directly linked to serving that specific customer.

Knotts Woodproducts Company Mills and Distributes High-Quality Hardwoods to Furniture