Traditional customer profitability analyses would start with _____ less returns and allowances (net sales) and subtract the cost of goods sold.

A) gross sales
B) back orders
C) the forecast
D) gross margin

Customer Profitability Analyses

The method of determining the profit margin and overall profitability of individual customers to guide business strategies.

Gross Sales

The total revenue generated from sales of goods or services before any deductions are made, such as returns, allowances, and discounts.

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor.