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4-1 Discussions: Cost Allocation and Profitability

To begin, select a company of your choice.( I selected Accounting Company, that is the company I work for at this moment)  It may be the company you work for, a company that you have worked for in the past, or a company that you would like to work for, and, after briefly explaining the relationship between cost allocation and customer profitability, focus your response on the following five main factors that your chosen company could use to evaluate customer profitability:

• Likelihood of customer retention
• Potential for sales growth
• Long-run customer profitability
• Increases in overall demand from having well-known customers
• The ability to learn from customers

Discuss how and why examining these variables could help your chosen company increase its overall profitability.