Question: IBM implements ABC for its support activities: Information Technology ($5,000,000, 800 projects), Human Resources ($3,000,000, 500 employees), Marketing ($2,500,000, 1,500 campaigns). Requirements: Apply the revenue

  1. IBM implements ABC for its support activities: Information Technology ($5,000,000, 800 projects), Human Resources ($3,000,000, 500 employees), Marketing ($2,500,000, 1,500 campaigns).
    • Requirements:
      • Apply the revenue recognition principle to determine when IBM should recognize revenue related to support activities.
      • Calculate the activity rate for each support activity considering revenue recognition timelines.
      • Allocate costs to different business units based on activity usage and revenue recognition principles.
      • Analyze the cost-effectiveness of each support activity with respect to revenue recognition.
      • Recommend improvements in resource allocation and revenue recognition practices based on ABC insights.

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