In a marketing cost analysis:

Question

Quizplus · Accepted Answer

A common approach in marketing cost analysis is to allocate ledger expenses (indirect costs) to activity-cost groups, and then allocate these activity costs among marketing units such as territories or products. This approach helps to accurately track and analyze the costs associated with each unit, and enables the identification of areas that may require cost reduction or increased investment. Indirect expenses should be allocated to get an accurate picture of the net profit of a territory or product. Direct costs are costs that can be directly assigned to a specific product or activity, while indirect costs are those which cannot be attributed to a specific product or activity without a reasonable amount of effort. In a well-managed firm, there may be some marketing costs that are direct costs, but there will also be indirect costs that need to be allocated appropriately.

In a Marketing Cost Analysis