Activity Based Cost Management - Activity Analysis

The video tutorial explains a cost management approach focusing on analyzing individual activities within a process to determine their efficiency and effectiveness. It covers identifying necessary steps, evaluating resources, and measuring outputs. The goal is to improve processes through automation, outsourcing, or restructuring, ultimately enhancing efficiency and effectiveness.

What is the primary focus of activity-based cost management?

• Identifying and analyzing individual activities within a process

• Determining the market value of a product

• Calculating the total cost of a project

• Assessing employee performance

Which of the following is NOT a factor considered in measuring the resources for each activity?

• Time required

• Monetary cost

• Employee satisfaction

• Opportunity costs

Why is it important to have a uniform level of value for each step in the process?

• To ensure all steps are equally expensive

• To eliminate unnecessary steps

• To compare and offset values between steps

• To increase the number of steps in a process

What is the ultimate objective of activity-based cost management?

• To maximize the use of monetary resources

• To increase the number of activities in a process

• To reduce the number of employees

• To enhance the efficiency and effectiveness of a process

Which strategy is NOT mentioned as a way to improve process efficiency?

• Merging processes

• Increasing employee salaries

• Outsourcing

• Automation