Question
Assuming that SQU LLC Company has been outsourcing its customer service in the belief that it would reduce costs and increase firm's profitability. However, the
Assuming that SQU LLC Company has been outsourcing its customer service in the belief that it would reduce costs and increase firm's profitability. However, the fim's financial records showed that there has been no meaningful increase in the firm's profitability. Previously, the firm used a single-rate method to allocate customer service costs. A per unit cost for customer service was computed and compared to the price of the outside supplier. The price charged by outside supplier was lower and thus the outside offer was accepted. What do you think would be the best explanation(s) based on costing method to the above scenario?
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