Questions:
1. What is activity-based management (ABM), and what specific management tools are used in ABM?
2. What is activity analysis, and how is it used with cost driver analysis to manage costs?
3. Why are value-added activities defined from a customer viewpoint?
4. In a televised football game, what activities are value-added? What activities are non-value-added? Would everyone agree with your choices? Why or why not?
5. Do cost drivers exist in a traditional accounting system? Are they designated as such? How, if at all, does the use of cost drivers in a traditional accounting system differ from those in an activity-based costing system?
6. If five people from the same organization calculated manufacturing cycle efficiency for one specific process, would each compute the same MCE? Why or why not?
7. Why do more traditional methods of overhead assignment "overload" standard high-volume products with overhead costs. How does ABC improve overhead assignments?
8. Once an activity-based costing system has been developed and implemented in a company, will that system be appropriate for the long term? Why or why not?
9. Are all companies likely to benefit to an equal extent from adopting ABC? Discuss.
10. Significant hurdles, including a large time commitment, are often encountered in adopting ABC. What specific activities associated with ABC adoption require large investments of time?