An ABC System Is One Building Block of Activity-Based Management

question 115

Multiple Choice

An ABC system is one building block of activity-based management (ABM) .The second building block is

• A)that senior management support is crucial.
• B)understanding the components of indirect cost pools.
• C)knowing the limitations of allocating indirect costs.
• D)the ability for managers to understand that the demand for output is central to profitability.
• E)automating the costing system.

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Definitions:

Lorenz Curve

A graphical representation of the distribution of income or wealth within a society, demonstrating the degree of inequality.

Equally Distributed

A distribution paradigm where resources, wealth, or opportunities are evenly shared among all members of a society or group.

45 Degree Line

A reference line in economic graphs that represents where the value of the independent variable is equal to the value of the dependent variable.

Income

The money received, usually from a job, business, or assets, over a certain period of time.