What Is the Aim of Activity-Based Management

question 122

Multiple Choice

What is the aim of activity-based management?

• A)to identify and eliminate all unnecessary activities
• B)to decrease the efficiency of necessary activities
• C)to add new activities that decrease value
• D)to increase non-value-added activities

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Definitions:

Raw Materials

The basic, unprocessed or partially processed materials used to produce goods and finished products in manufacturing.

Work in Process Inventory

Goods partially completed in manufacturing but not yet ready for sale, reported as a current asset.

Manufacturing Overhead Applied

The allocation of manufacturing overhead costs to units of product based on a predetermined rate or base.

Overhead Applied

The allocation of indirect costs to produced goods or services based on predetermined rates.