Question

As the new profit center manager, you switch carriers to a more expensive, but quicker, more responsive transportation carrier. You justify this because when using a(n) ____________ perspective, your overall inventory and warehouse savings more than offset the increase in transportation costs. Group of answer choices lane operations economic order quantity total cost ABC

Answer 1

Answer:

You justify this because when using a(n) _____ABC_____ perspective, your overall inventory and warehouse savings more than offset the increase in transportation costs.

Explanation:

The ABC perspective allocates overhead costs based on the cost drivers and the level of activity consumed by each cost driver.  This is the best cost allocation basis.  ABC is justified by the fact that activities consume resources or cause costs to be incurred.  As a profit center manager, your focus should be on minimizing the activities that drive up costs instead of just focusing on mere cost reduction without paying attention to the cost drivers.