How can activity-based costing help heather Gerald assess the attractiveness of the proposed policy?

Answer 1

Activity-based costing (ABC) can help Heather Gerald assess the attractiveness of the proposed policy by providing a more accurate allocation of costs associated with specific activities related to the policy. This detailed insight allows for a clearer understanding of the true costs and profitability of different segments or products affected by the policy. By identifying high-cost activities and areas for improvement, Heather can make informed decisions about whether the policy will enhance or detract from overall organizational performance. Ultimately, ABC supports strategic decision-making by providing data-driven insights into cost management and resource allocation.