True / False Questions
1.The value chain includes customer service, marketing, and suppliers.
2.International Financial Reporting Standards (IFRS) require companies to expense costs associated with R&D activities.
3.Non-value-added activities are those that add to a product's desirability.
4.Activities related to internal failure such as rework, scrap, and engineering change orders are value-added activities since they cannot be eliminated without increasing costs elsewhere in the value chain.
5.Non-value-added activities do not directly increase the worth of a product to a customer.
6.Value-added activities add to a product's desirability from the manufacturer's perspective.
7.The process of using activity-based costing to help reduce and eliminate non-value-added activities is activity-based management.
8.The development of activity-based cost information is a necessary prerequisite to activity-based management.
9.Activity-based costing systems refer to acquiring materials and manufacturing goods only as needed to fill customers' orders.
10.Activity-based management is a subset of activity-based costing.