Question

Activity-based management begins with the assumption that management cannot control costs. This statement is

1) True
2) False

Answer 1

Activity-based management assumes that management can control costs by focusing on activities, so the statement is False.

Step-by-step explanation:

Activity-based management (ABM) does not begin with the assumption that management cannot control costs. Therefore, the statement is False. ABM is a method of management that aims to improve the efficiency and effectiveness of an organization by focusing on activities and the associated costs. It assumes that by managing activities, organizations can control costs and even improve customer value. Managers use ABM to streamline processes, reduce waste, and enhance productivity, which in turn can lead to a more strategic allocation of resources.