In contrast to theory of constraints (TOC),activity-based costing (ABC)systems:
A)take a long-run perspective and focus on improving process by eliminating non-value activities.
B)take a short-run perspective and focus on improving process by increasing non-value activities.
C)are less useful for long-run pricing,and capacity management.
D)are less useful in long-run cost control.
E)are less useful in long-run capacity management.

Question

Quizplus · Accepted Answer

Activity-based costing systems take a long-run perspective and focus on improving processes by eliminating non-value activities, while the theory of constraints (TOC) focuses on identifying and managing constraints to improve efficiency. ABC is useful for long-run pricing and capacity management, while TOC is more focused on short-term improvements. Therefore, option A is the correct answer. Option B is incorrect as ABC aims to minimize non-value activities, not increase them. Option C, D, and E are also incorrect as ABC is useful for long-run pricing, cost control, and capacity management.

In Contrast to Theory of Constraints (TOC),activity-Based Costing (ABC)systems