When Comparing Activity-Based Costing (ABC) and the Theory of Constraints

question 67

Multiple Choice

When comparing Activity-based costing (ABC) and the Theory of Constraints (TOC) , the approach each method takes toward profitability analysis is:

• A) TOC takes a short-term approach and ABC takes a long-term approach.
• B) TOC takes a long-term approach and ABC takes a short-term approach.
• C) Both TOC and ABC take a short-term approach.
• D) Both TOC and ABC take a long-term approach.

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Definitions:

Low Price

An amount charged for a product or service that is relatively lower than the average or general market level, often aimed at attracting customers or gaining market share.

Simultaneous-Move Game

A strategic scenario in game theory where all players make their decisions or choose their actions at the same time without knowledge of the other players' choices.

High Price

High price indicates a scenario where the cost of a good or service is considered greater than usual or compared to its competitors.

Tit For Tat Strategy

A strategy in game theory where a participant replicates an opponent's previous action, whether cooperative or competitive.