Cost allocation and customer profitability

Assignment Help Financial Accounting

Reference no: EM13746293

Explain the relationship between cost allocation and customer profitability. Why is determining customer profitability important to a business, and how can appropriate cost allocation help accomplish that goal? Focus on the following five main factors that businesses can use to evaluate customer profitability: Likelihood of customer retention Potential for sales growth Long-run customer profitability Increases in overall demand from having well known customers The ability to learn from customers Discuss how and why examining these variables can help a business increase its overall profitability.

Likelihood of customer retention

Potential for sales growth

Long-run customer profitability

Increases in overall demand from having well-known customers

The ability to learn from customer

Discuss how and why examining these variables could help your chosen company increase its overall profitability.

Reference no: EM13746293

Questions Cloud

Ledger accounts-journal entries and trial balances : Chapter 3 Processing Accounting Information details how accounting information is processed. “Ledger accounts, journal entries, and trial balances are tools that allow a company to process vast amounts of data efficiently.”

Used in the predetermined overhead rate must have been : Brown Inc. uses machine hours for its predetermined overhead rate. For the year, Brown had an over applied manufacturing cost of $2,600. The additional information for the last year is given below. The estimated manufacturing overhead at the beginnin..

Establishing budgets for governmental entities : Establishing budgets for governmental entities takes on special significance because of the importance of governmental compliance with final fund budgets. Students need to understand this special emphasis in governmental accounting before applying it..

Bartons investment and fallows investment : Barton and Fallows form a partnership by combining the assets of their separate businesses. Barton contributes accounts receivable with a face amount of $48,000 and equipment with a cost of $193,000 and accumulated depreciation of $103,000.

Cost allocation and customer profitability : Explain the relationship between cost allocation and customer profitability. Why is determining customer profitability important to a business, and how can appropriate cost allocation help accomplish that goal?

Information relates to the breakeven point : The following information relates to the breakeven point at the Princeton Corporation:

Campbell one-half time to the business : Jackson and Campbell have capital balances of $100,000 and $300,000, respectively. Jackson devotes full time and Campbell one-half time to the business. Determine the division of $150,000 of net income under each of the following assumptions:

Research problem with the research question : Introduction- the organization and everything related (what you did in week 1)Research Problem with the research questionPurpose of the research/objective

What was the cost of goods sold for the period : A company incurred total manufacturing costs of $500,000 during 2007. Work in process inventories at the beginning and end of 2007 were $100,000 and $50,000 respectively.

User Account

All Pages