Customer profitability analysis (CPA) is best conducted with the tools of an accounting technique called ________.
A) input-output analysis
B) factor analysis
C) revenue-based costing
D) activity-based costing
E) future date costing

Question

Quizplus · Accepted Answer

Customer profitability analysis (CPA) is best conducted using activity-based costing (ABC) because it assigns costs to specific activities and then to the products or services based on their use of those activities. This helps to accurately determine the profitability of specific customers by analyzing their actual costs of servicing them.

Customer Profitability Analysis (CPA) Is Best Conducted with the Tools