Question

After implementing activity-based costing to estimate customer-level technical support costs, ABC Company found that customer X is unprofitable. What are reasonable ways to deal with this customer? Select ALL correct answers (you might need to select more than one answer). a) charge the customer a higher price per unit (assume that you can charge different customers different prices for the same product or service) b) limit the number of free technical-support calls per customer c) if nothing else works, "fire" the customer d) charge a fee per technical-support call e) trick question -- it is impossible to estimate customer-level profitability

Answer 1

Answer:

b) limit the number of free technical-support calls per customer

d) charge a fee per technical-support call

Explanation:

In the case when a company implements the ABC costing so here it identified the profitable group i.e. the high profitable customer would be 30% and the 40% i.e. less profit is considered as a making customer

And, the left balance would be either less or non-profitable

So as per the given situation, the option B and the option D is correct and the same is to be considered