COST ACCOUNTING
ACTIVITY BASED MANAGEMENT
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
cost and time dimensions
|
|
|
cost and activity dimensions
|
|
|
cost and process dimensions
|
|
|
process and activity dimensions
|
Detailed explanation-1: -1. The two dimensions are the cost dimension and the process dimension.
Detailed explanation-2: -As such, the process dimension of the ABM technique is concerned with what, why, and how activities are carried out in the entire organizational system. Moreover, it is imperative to note that the process aspect of ABM is geared at reducing costs.
Detailed explanation-3: -The modern ABC model has two dimensions: a costing dimension and a process dimension. The cost dimension provides accurate cost by measuring cost objects and the process dimension provides decision useful information for Activity Based Management. ABC involves a two-stage overhead allocation process.
Detailed explanation-4: -Activity-based management (ABM) is a means of analyzing a company’s profitability by looking at each aspect of its business to determine strengths and weaknesses. ABM is used to help management find out which areas of the business are losing money so that they can be improved or cut altogether.