Question $16$

The Cost$-$to$-$Serve $($CTS$)$ includes all the Costs incremental to serving the customer or segment or channel. Acme Manufacturing supplies to a number of major computer OEMs $($Original Equipment Manufacturers$)$ and is embarking on a CTS analysis for their major customers. A key objective for Acme to assess the true CTS for their customers is to:

Include it in the Income Statement as a separate line item to comply with GAAP standards and avoid SEC investigations.

Identify the services that their salespeople are providing to their customers in order to decide whether to provide the services in$-$house or outsource them.

Determine a new Sales force variable compensation system

Negotiate shipping rates from their major logistics providers.

Identify the profitability of selling and contracts to their big customers.