Companies Use Activity-Based Management to

question 43

Multiple Choice

Companies use activity-based management to

• A)allocate the cost of activities to cost objects.
• B)forecast customer demand.
• C)develop systems for direct cost tracing and indirect cost allocation.
• D)plan and organize the implementation of activity-based costing.
• E)eliminate non-value added activities.

---

Definitions:

Natural Monopoly

A market structure where a single firm can supply a good or service to an entire market at a lower cost than two or more firms, often due to high fixed or infrastructure costs.

Economies Of Scale

The cost advantages that enterprises obtain due to their scale of operation, resulting in a decreased cost per unit of production.

Single-Firm

Refers to a market situation dominated by a single producer or service provider.

Network Externalities

Effects on a user of a product or service that depend on the number of other users of the same or compatible products or services.