Managers are most likely to identify activities in an ABC system by:
A) Examining the financial statements
B) Forecasting market demand using the high-low method
C) Consulting employees
D) Tracking general ledger account balances

Question

Quizplus · Accepted Answer

Managers are likely to identify activities in an ABC system by consulting employees who are directly involved in the production process. This can provide a more accurate understanding of the cost drivers associated with each activity. Examining financial statements and tracking general ledger account balances may not provide sufficient detail to identify individual activities, and forecasting market demand using the high-low method is not related to identifying activities in an ABC system.

Managers Are Most Likely to Identify Activities in an ABC