Measuring customer profitability only by looking at whether the sales revenue a customer generates exceeds the cost of goods sold ignores
A)All the selling and administrative costs incurred to provide customer service and support.
B)Manufacturing costs incurred as overhead.
C)All fixed costs.
D)Only the depreciation cost.

Question

Quizplus · Accepted Answer

Measuring customer profitability solely based on sales revenue versus cost of goods sold overlooks the additional costs of providing customer service and support. These selling and administrative costs can significantly impact the overall profitability of a customer. Therefore, ignoring these costs can lead to inaccurate assessments of customer profitability. Option B, C, and D are incorrect as they do not capture the full extent of costs associated with serving a customer.

Measuring Customer Profitability Only by Looking at Whether the Sales