Which of the following statements describes an occurrence in the contribution-margin approach to marketing cost analysis?
A) All costs are assumed to be variable.
B) Indirect costs become easier to allocate.
C) All direct and indirect expenses are allocated to each marketing unit being analyzed.
D) Only direct expenses are allocated to each marketing unit being analyzed.
E) The organizational overhead expenses are attributed to each marketing unit.

Question

Quizplus · Accepted Answer

In the contribution-margin approach to marketing cost analysis, only direct expenses are allocated to each marketing unit being analyzed. This method focuses on the variable costs directly associated with producing and selling products, excluding fixed costs and overhead expenses from the calculation for each unit.

Which of the Following Statements Describes an Occurrence in the Contribution-Margin