The division of all the costs related to customers on the basis of different cost allocation bases or cost drivers are called ___________?
Correct answer: C. customer cost hierarchy
- A. treasury costing hierarchy
- B. customer profitability hierarchy
- C. customer cost hierarchy
- D. partial costing hierarchy
Explanation
A customer cost hierarchy groups customer-related costs according to the level at which they are incurred, using suitable cost drivers such as orders, customers, channels, or the whole company. The other listed hierarchies are not standard terms for this classification.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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