Question
Customer profitability analysis (CPA) assesses the profitability of each customer by focusing on all of the following costs, except: After-sales support Visiting the customer Granting credit Delivering the customer's goods Handling the customer's order Taxation costs Holding inventories
Answer
4.7
(231 Votes)
Lyla
Master · Tutor for 5 years
Answer
Taxation Costs and Holding Inventories.
Explanation
## Step1:This is a conceptual question regarding Customer Profitability Analysis (CPA). The CPA assesses the profitability of every customer by concentrating on all the costs incurred in dealing with their specific needs. If a cost is not directly associated with specific customers, CPA would normally not incorporate it.## Step2:Let's decide which of the options would not primarily be applied for each individual customer's CPA.'After-sales support', 'Visiting the customer', 'Granting credit', 'Delivering the customer's goods', and 'Handling the customer's order': These all are primary costs involved in managing customers and are particular to each. They may vary depending on the need of each customer and are thus considered in CPA.## Step3:'Taxation costs' on the other hand, are not primarily associated with any particular customer. They generally apply to all customers uniformly and usually don't vary from customer to customer like the other costs mentioned. Hence, they are not usually attributed to individual customers with CPA.'Holding inventories' can be both, related and not-related to individual customer depending on the situation. However mostly they aren't specific to individual customers and hence can not be counted.