Which of the Following Is NOT an Objective of Activity-Based

question 143

Multiple Choice

Which of the following is NOT an objective of activity-based management?

• A) to improve decision making through better cost information
• B) to increase the number of activities necessary to perform processes
• C) to encourage cost reduction through continuous improvement
• D) to increase profitability

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Definitions:

Nonmanufacturing Cost

Expenses not directly tied to the production of goods, such as administrative, sales, and marketing costs.

Prime Costs

The combined direct costs of raw materials and labor that are directly involved in the production of a product.

Indirect Material

Materials used in the manufacturing process that are not directly incorporated into the final product, such as lubricants and cleaning supplies.

Direct Labor

The labor costs directly associated with the manufacturing of products, including wages of workers who are actively involved in the product's creation.