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A customer-level cost refers to the total cost incurred by an organization in meeting the needs of consumers. It is essential for organizations to calculate the costs incurred in each step of the value addition process in order to minimize the cost and maximize the profit.The traditional costing approach omits it in the value addition process. It is an integral part of cost calculation. You can face the challenge in this field by taking assistance in customer-level costs homework help.
Customer-level cost and its significance in the overall cost process:
In order to stay relevant in the market, an organization needs to consider the customer-level cost before finalizing the price that would be incurred by the consumers.Contrary to traditional costing method, the activity based costing method helps to achieve this objective efficiently. A customer-level cost, integral to activity based costing, is the cost incurred by any activity to meet the requirements of the customers.
You need to grasp that a customer-level cost is customer specific and is not directly related to the production cost of the goods and services. Therefore, it is inevitable for organizations to omit this aspect of the costing in order to maximize the profits. With customer-level costs assignment help you can learn to wield the homework with an industry-specific approach and prepare yourself for tomorrow.
Before you proceed further on customer-level cost, you need to understand the two modes of costing used by the organizations:
- Traditional Costing:
This is an obsolete approach of costing that assigns the production overhead on the basis of production volume. It assigns all the indirect costs to the volume of production.
- Activity Based Costing:
This approach considers each and every cost that is incurred by the organization in providing the goods and services to the customers. It allows eliminating unnecessary costs wherever required.
A customer-level cost includes various costs to an organization which is not directly related to the production cost. You can understand factors included in the customer-level costs homework help by the points mentioned below:
- Sales calls and Prospect generation: every effort made to bring in customers, make them prospects, and close the deal.
- Account receivables: the cost incurred in receiving the amount of the goods and services by an organization.
- Packaging: the cost incurred in wrapping up the goods before the shipment.
- Distribution: the cost incurred in
- Technical Support: the cost incurred in post-sales activities.
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