A company's strategic options for remedying cost disadvantages in internally performed value chain activities do NOT include
A) revamping its value chain to eliminate or bypass some cost-producing activities (particularly low value-added activities).
B) implementing the use of best practices, particularly for high-cost activities.
C) investing in productivity-enhancing, cost-saving technological improvements.
D) switching to activity-based costing.
E) outsourcing the performance of high-cost activities to vendors that can perform them more cheaply.

Question

Quizplus · Accepted Answer

Activity-based costing is a method of cost accounting that allocates costs based on the activities performed, rather than traditional methods of allocating costs based on labor or machine-hours. It is not a strategic option for remedying cost disadvantages in internally performed value chain activities, but rather a cost accounting method that can be used to improve the accuracy of cost information. The other options listed are all possible strategic options for remedying cost disadvantages in internally performed value chain activities.

A Company's Strategic Options for Remedying Cost Disadvantages in Internally