Customer Value Is an Important Part of Activity-Based Management and It

question 9

Multiple Choice

Customer value is an important part of activity-based management and it enables an organisation to achieve both cost reduction and improved customer value through the use of which of the following?
i. Identifying major opportunities for cost reduction.
ii. Determining root causes of these costs.
iii. Developing programs to eliminate the causes of these costs.
iv. Introducing performance measures to monitor the effect of these programs.

• A) i, ii and iv
• B) i, ii and iii
• C) ii, iii and iv
• D) All the given answers

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Definitions:

Variable Selling

Refers to costs that vary directly with the level of sales, such as commissions or shipping fees.

Idle Capacity

The portion of a company's resources, such as labor or machinery, that is not being used to its full potential during the production process.

Joint Processing Costs

The expenses incurred during the initial stages of processing where multiple products are produced simultaneously before they are split into separate components.

Split-off Point

The stage in a production process where multiple products are derived from a single input or process, each taking a different processing route afterward.