Which of the following is a correct definition of activity-based management?
Which of the following is a correct definition of activity-based management?
(A) An approach to the costing and monitoring of activities which involves tracing resource consumption and costing final outputs. Resources are assigned to activities and activities to cost objects based on consumption estimates. The latter utilise cost drivers to attach activity costs to outputs.
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Order Paper Now(B) The identification and evaluation of the activity drivers used to trace the cost of activities to cost objects. It may also involve selecting activity drivers with potential to contribute to the cost management function with particular reference to cost reduction.
(C) A method of budgeting based on an activity framework and utilising cost driver data in the budget-setting and variance feedback processes.
(D) A system of management which uses activity-based cost information for a variety of purposes including cost reduction, cost modelling and customer profitability analysis.
(E) A grouping of all cost elements associated with an activity.
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