What Sometimes Makes Implementation of Activity-Based Costing Difficult in Service

question 93

True/False

What sometimes makes implementation of activity-based costing difficult in service industries is that a smaller proportion of overhead costs are company-wide costs.

Understand the role of human resources and demand management in service sector aggregate planning.

Distinguish between capacity and demand options in aggregate planning.

Appreciate the implications of using pure level and pure chase strategies in planning.

Explain the significance of incorporating historical managerial performance in planning.

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Definitions:

Escalating commitment

A decision-making process where individuals or organizations continue to invest in a failing course of action due to the significant resources already spent.

Non-programmed Decision-Making

The process of making decisions in unpredictable and unique situations, requiring creative and critical thinking beyond routine procedures.

Satisficing

A decision-making strategy that aims for a satisfactory or adequate result, rather than the optimal solution, due to constraints.

Consultative decisions

a process where decision-making is shared among group members, often leading to consensus.