Question

Which of the following is​ true?

A.
ABM refers to using​ activity-based cost information to make decisions.
B.
​Value-added activities are also referred to as waste activities.
C.
The goal of ABM is to decrease the amount of​ value-added activities.
D.
ABC is only applicable to manufacturers.

Answer 1

The correct answer is A. ABM refers to using activity-based cost information to make decisions.

Step-by-step explanation:

The correct answer is A. ABM refers to using activity-based cost information to make decisions.

Activity-Based Management (ABM) is a management approach that uses activity-based costing (ABC) information to make decisions. ABC is a costing system that allocates indirect costs to products or services based on the activities that create those costs. ABM uses this cost information to analyze and improve business processes, identify cost drivers, and make informed decisions.

For example, a company may use ABM to evaluate the profitability of different product lines or customer segments by understanding the costs associated with each activity in the value chain. This information can help the company make decisions to optimize resources, reduce costs, and increase profitability.