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26 February, 00:44

Activity-based costing strives to create an environment that

A. will enable workers to manufacture zero-defect products.

B. is the process of choosing among competing alternatives.

C. was established in response to financial scandals.

D. encourages process-value analysis.

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Answers (1)
  1. 26 February, 04:03
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    D. encourages process-value analysis.

    Explanation:

    Activity based costing aims to allocate cost of different processes and activities to the department which utilizes the cost at maximum, on the basis of actual cost drivers.

    Every activity has a cost driver, as for example for the expense or activity of rent is based on area allocated to each department thus cost driver here is area of the department.

    Therefore, Activity based Costing encourages the process value analysis, which process is best.

    It states which process added how much value to each product or department, it is a kind of process analysis.

    Thus, correct option is D
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