which one of the following is the focus of activity-based management? a. to improve allocation of indirect production costs. b. to reduce the number of cost pools. c. to increase the number of volume-related allocation bases. d. to improve the effectiveness of activities.

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19-12-2022
Business

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which one of the following is the focus of activity-based management? a. to improve allocation of indirect production costs. b. to reduce the number of cost pools. c. to increase the number of volume-related allocation bases. d. to improve the effectiveness of activities.

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contexto1019 contexto1019 · Answer 1 · 2022-12-23T21:53:15+01:00

The focus of activity-based management is to (d) improve the effectiveness of activities.

Activity-based costing aims to identify and minimize cost drivers by maximizing resources. Activity-based management concentrates on business processes and managerial activities driving organizational business goals. Activity-based management (ABM) is a technique for examining a company's profitability and identifying strengths and shortcomings in each area of its operations.

ABM is used by management to identify which sections of the company are losing money so that they may be improved upon or eliminated entirely. ABM frequently uses data obtained through activity-based costing (ABC), a technique for identifying and decreasing cost drivers through more efficient resource utilization.

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