A major purpose of marketing cost analysis is to:
A) determine which costs are fixed and which are variable.
B) avoid the pitfalls of the full-cost approach to allocating costs.
C) divide costs into natural accounts.
D) show the marketing manager where costs occur in relation to serving particular customers.
E) avoid the pitfalls of the contribution-margin approach to allocating costs.

Question

Quizplus · Accepted Answer

The major purpose of marketing cost analysis is to show the marketing manager where costs occur in relation to serving particular customers. This helps in identifying the most cost-effective ways of serving customers and making necessary changes to improve profitability. Option A is incorrect as determining fixed and variable costs is a part of cost classification. Option B and E deal with different approaches to cost allocation and are not the major purposes of marketing cost analysis. Option C refers to dividing costs into different categories for reporting purposes and is also not related to the major purpose of marketing cost analysis.

A Major Purpose of Marketing Cost Analysis Is To