April 2013 Question 5 solution

Discussion in 'SP2' started by dChetty, Apr 8, 2016.

  1. dChetty

    dChetty Member

    The solution says that "the bottom up approach more accurately determines the profitability by product type. This could be to reduce cross subsidies and reduce company exposure to selling products with low expense loadings". How will the bottom up approach more accurately determine profitability and how will cross subsidies be reduced?
     

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