Why are the benefits of adopting ABC/ABM higher for companies in competitive markets?
A) Because ABM can pinpoint opportunities for cost savings
B) Because accounting /information system expertise is inexpensive to develop
C) Because accurate product cost information is not as relevant for price setting
D) Because companies in competitive markets have low indirect costs

Question

Quizplus · Accepted Answer

Adopting ABC/ABM enables companies to identify and eliminate non-value-adding activities, which can lead to more accurate cost information and cost savings. In competitive markets, companies need to operate efficiently to remain competitive, making the benefits of ABC/ABM particularly valuable.

Why Are the Benefits of Adopting ABC/ABM Higher for Companies