Which of the following statements best describes the major difference between activity-based costing (ABC)and activity-based management (ABM)?
A)ABC is only used in manufacturing companies,and ABM is only used in service companies.
B)ABC is used in managerial accounting,and ABM is used in financial accounting.
C)The goal of ABC is to accurately measure costs,and the goal of ABM is to manage costly activities.
D)ABC is only used in service companies,and ABM is only used by merchandising companies.
E)None of the answer choices is correct.

Question

Quizplus · Accepted Answer

The major difference between ABC and ABM is in their goals. ABC aims to accurately measure and assign costs to products, services, or customers. On the other hand, ABM focuses on managing costly activities, identifying ways to improve efficiency and reduce costs, and ultimately improving profitability. While ABC provides the data, ABM provides the tools to analyze and act on that data to make better decisions. Other answer choices are incorrect as they either wrongly associate ABC and ABM with specific industries or accounting fields or provide incomplete or inaccurate information.

Which of the Following Statements Best Describes the Major Difference