The Objective of the Cost Dimension of Activity-Based Management Is

question 102

Multiple Choice

The objective of the cost dimension of activity-based management is:

• A)reducing the number of trade debtors of a firm.
• B)increasing the sales of all products.
• C)improving the accuracy of cost assignments.
• D)reducing the amount of bad debts incurred by a firm.

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Definitions:

Earnings

The net amount of money a company earns during a specific period, often reported quarterly or annually, indicating its profitability.

Market-capitalization Rate

A valuation ratio determined by dividing the market capitalization of a company by its after-tax earnings, reflecting how much investors are willing to pay for a share of the company's earnings.

Plowback Ratio

The proportion of earnings retained by a company for reinvestment in its operations rather than being paid out as dividends to shareholders.

Expected ROE

The projected Return on Equity, estimating the amount of net income returned as a percentage of shareholders' equity.