Question

Applying Activity-based management to ABC systems: A. Reveal activities that can be eliminated B. Help control nonfinancial items such as number of setup hours C. Help identify new designs to reduce costs D. All of these answers are correct

Answer 1

Answer:

D) . All of these answers are correct

Answer 2

Answer:

D) All of these answers are correct

• A. Reveal activities that can be eliminated
• B. Help control nonfinancial items such as number of setup hours
• C. Help identify new designs to reduce costs

Explanation:

Activity based management (ABM) works with activity based costing (ABC) in order to evaluate the performance of different business activities. ABM uses ABC to perform a value chain analysis in order to determine what activities can be eliminated and what processes must be redesigned in order to reduce costs. ABM basically represents a re-engineering process that focuses on cost reduction.