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Which cost hierarchy only specific to customer profitability

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Reference no: EM132521462

Question 1: Activity-based costing and customer profitability analysis both use cost hierarchies to categorize costs. Which of the following cost hierarchies is only specific to a customer profitability analysis?

a. Distribution channel costs

b. Batch level costs

c. Output unit-level costs

d. Facility sustaining costs

Question 2: Quick Shop Printing has two workstations, cutting and pasting. The cutting station is limited by the speed of operating the cutting machine. Pasting is limited by the speed of the workers. Pasting is working at maximum capacity and as a result Quick Shop is turning away extra business. They have several options to consider. Select the appropriate one.

a. Do nothing since the process and costs are fixed in the short run.

b. Improve the efficiency of the cutting station.

c. Hire a contractor to help with the pasting workstation.

d. Reduce the selling prices of Quick Shop's products.

Reference no: EM132521462

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