Customer Profitability Analysis uses activity-based costing to determine the activities, costs, and profits associated with serving a particular customer. TRUE
Customer Profitability Analysis (CPA for short) is a management accounting and credit insurance technique that enables companies and lenders to determine the profitability of each customer or customer segment by attributing profits and costs to each customer individually. Customer Profitability Analysis use activity-based costing to determine the activities, costs, and benefits associated with serving a particular customer.
Remove a customer, product, or segment if revenue is less than the variable cost. Customer Profitability Analysis uses activity-based costing to determine the activities, costs, and profits associated with serving a particular customer.
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