equirement $3.$ Comment on

CarterCarter$\text{'}$s

concerns about the accuracy and limitations of ABC. $($Select all that$$ apply.$)$

A$.$

Using$$ inspection$-$hours and$$ setup$-$hours as allocation bases would probably not lead to more accurate cost information and would also have no effect on measurement costs.

B$.$

CarterCarter$\text{'}$s

comments about ABC implementation are not valid.

C$.$

Using$$ inspection$-$hours and$$ setup$-$hours as allocation bases would also probably lead to more accurate cost$$ information, but it would increase measurement costs.

D$.$

CarterCarter$\text{'}$s

comments about ABC implementation are valid.

E$.$

When designing and implementing ABC$$ systems, it is not necessary for managers and management accountants to trade off the costs of the system against its benefits.

F$.$

Adding more activities would have no impact on the complexity of the system and should be inexpensive to implement. It would not necessarily improve the accuracy of cost information and therefore may not improve decision making.

G$.$

When designing and implementing ABC$$ systems, managers and management accountants need to trade off the costs of the system against its benefits.

H$.$

Adding more activities would make the system harder to understand and more costly to$$ implement, but it would probably improve the accuracy of cost$$ information, which, in$$ turn, would help

PrattPratt

make better decisions.

Part $5$

Requirement $4.$ How might

PrattPratt

find the ABC information helpful in managing its$$ business? $($Select all that$$ apply.$)$

A$.$

$$Activity$-$based management$($ABM$)$ is a management system where each component in a production line is manufactured only when it is needed in the next step of the process.

B$.$

For the long$$ term, activity$-$based costing can assist management in making decisions regarding the productivity of the employees.

C$.$

ABM highlights possible$$ improvements, including reduction or elimination of$$ non$-$value$-$added activities, selecting lower cost$$ activities, sharing activities with other$$ products, and eliminating waste.

D$.$

For the long$$ term, activity$-$based costing can assist management in making decisions regarding the viability of product$$ lines, distribution$$ channels, marketing$$ strategies, etc.

E$.$

$$Activity$-$based management$($ABM$)$ is the use of information from$$ activity$-$based costing to make improvements in a firm.

F$.$

As a$$ whole$-$company philosophy, ABM focuses on$$ strategic, as well as tactical and operational activities of the company.

G$.$

$$Activity$-$based management is an integrative philosophy of management for continuously improving the quality of products and processes by focusing primarily on the direct labor costs.

H$.$

ABM is an integrated approach that focuses$$ management's attention on analyzing the direct costs incurred in the manufacturing process with the ultimate aim of cost reduction.

I.

ABM is an integrated approach that focuses$$ management's attention on activities with the ultimate aim of continuous improvement