Cost Accounting (15th Edition)

Published by Prentice Hall
ISBN 10: 0133428702
ISBN 13: 978-0-13342-870-4

Chapter 14 - Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis - Assignment Material - Questions - Page 578: 14-2

Answer

Customer-profitability analysis is crucial for managers because it helps identify which customers are contributing to the company's profits and which may be causing losses. This information allows managers to make strategic decisions regarding pricing, marketing, and resource allocation. Understanding the profitability of individual customers is essential for optimizing a company's overall financial performance.

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