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:

Fraudulent Activity

An illegal act involving the intentional deception or misrepresentation that an individual or entity makes to gain a benefit or advantage.

Debit Memorandum

A document or entry recorded by an entity that decreases a balance in another's account, typically used in adjustments between businesses.

Cash Balance

The amount of cash a company has on hand at a given time, reflecting its liquidity.

Custody

The protective care or guardianship of someone or something, often used in legal contexts to refer to the care of children or assets.