A customer cost hierarchy categorizes costs related to customers into different cost pools on the basis of different ________.
A) contribution-margin ratios of products
B) distribution-channel costs
C) levels of cause-and-effect relationships
D) division-sustaining costs

Question

Quizplus · Accepted Answer

A customer cost hierarchy categorizes costs based on the levels of cause-and-effect relationships between different activities and cost drivers associated with serving customers. The hierarchy typically includes four levels: customer, order, product, and distribution channel. Thus, choice C is the correct option. The other options listed (A, B, and D) are not directly related to categorizing costs based on different activities and cost drivers associated with serving customers.

A Customer Cost Hierarchy Categorizes Costs Related to Customers into Different