As a lead in a successful consulting firm, you are about to visit with a COO (chief operating officer) of a high profile electronics manufacturing firm. The COO has asked you to help fine-tune the recently installed ABC system. The controller set up the ABC system by allocating overhead on the basis of four drivers: direct labor dollars, machine hours, kilowatt hours, and number of units produced. The COO would like a critique of the current system, as well as any other potential benefits that could be achieved with an ABC system. FIRST, provide the COO a careful explanation of how ABC works. THEN, provide feedback on the existing ABC system. FINALLY, explain how ABC can help a company achieve their strategic goals

Which of the following statements is correct? a) due to limited liability, unlimited lives, and ease of ownership transfer, the vast majority of u.s. businesses (in terms of number of businesses) are organized as corporationsb) most businesses (by number and total dollar sales) are organized as proprietorships or corporation. however, if the business gets very large, it becomes advantageous to convert to a corporation, primarily because corporations have important tax advantages over proprietorships and partnerships.c) due to legal considerations related to ownership transfers and limited liability, which affect the ability to attract capital, most business (measured by dollar sales) is conducted by corporations in spite of large corporations' less favorable tax treatmentd) large corporations are taxed more favorably than proprietorshipse) corporate stockholders are exposed to unlimited liability