Activity-Based Cost Management (ABM)can Best Be Defined As

question 77

Multiple Choice

Activity-based cost management (ABM) can best be defined as:

• A) a cost system using multiple departmental overhead rates.
• B) the use of cost information gathered using activity-based costing (ABC).
• C) a quality-control system focusing on eliminating errors and mistakes.
• D) an incentive system for a company's key decision-makers.

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Definitions:

Second Best

Refers to a situation wherein the optimal condition cannot be achieved, and the best possible alternative under the given restrictions is adopted.

Previously Existing Distortions

Inefficiencies or imperfections already present in a market before a new policy or change was implemented.

Distortionary Tax

A tax that causes people to alter their behavior and economic decisions from what they would have chosen in the absence of the tax.

Principle of Neutrality

The concept that certain measures, such as fiscal policies, should be designed to have a neutral effect on economic choices and competition.