An ABC system is one building block of activity-based management (ABM).The second building block is
A)that senior management support is crucial.
B)understanding the components of indirect cost pools.
C)knowing the limitations of allocating indirect costs.
D)the ability for managers to understand that the demand for output is central to profitability.
E)automating the costing system.

Question

Quizplus · Accepted Answer

The second building block of activity-based management (ABM) is understanding that the demand for output is central to profitability, as it focuses on managing activities to improve customer value and profit.

An ABC System Is One Building Block of Activity-Based Management