Successful Activity-Based Costing (ABC)implementation Depends Upon the Firm

question 100

Multiple Choice

Successful activity-based costing (ABC) implementation depends upon the firm:

• A)Having support of consultants with appropriate expertise.
• B)Having a thorough activity analysis.
• C)Starting with a relatively simple system.
• D)Having well-trained managers.
• E)Having adequate computer resources.

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Definitions:

ROE

Return on Equity, a measure of financial performance calculated by dividing net income by shareholders' equity, indicating how effectively management is using shareholders’ funds to generate profit.

Debt Ratio

A financial metric that assesses a firm's level of indebtedness by dividing its total liabilities by its total assets.

Equity Multiplier

A financial leverage ratio that measures the portion of a company's assets that are financed by stockholders' equity.

Net Income

The company's net earnings following the subtraction of all costs and taxes from its income.