Activity-Based Management (ABM) uses information from Activity-Based Costing (ABC) to identify and eliminate non-value-added activities, thereby improving operational efficiency and reducing costs. Moving the packaging department closer to the shipping department is a strategic decision aimed at reducing material handling time and costs. Material handling is a classic example of a non-value-added activity that ABM seeks to minimize. This physical reorganization of the workflow is a direct result of analyzing activities to enhance value and streamline processes, which is the core principle of ABM.

A. This describes a routine accounting entry for direct costs in any costing system, not a strategic decision derived from ABM principles.

B. Responding to vendor complaints is a standard operational task within customer service, not a process re-engineering decision informed by ABM.

C. Calculating a single plant-wide overhead rate is characteristic of a traditional, volume-based costing system, which ABM and ABC are designed to replace for greater accuracy.

1. Heisinger, K., & Hoyle, J. B. (n.d.). Managerial Accounting. Saylor Academy. In Chapter 4, Section 4.5, "Using Activity-Based Costing to Make Decisions," the text explains that ABM involves using ABC data to reduce or eliminate non-value-added activities. The text provides examples of non-value-added activities, including "moving raw materials and parts from the storeroom to the production floor." The decision in option D directly addresses this type of inefficiency.

2. Walther, L. M., & Skousen, C. J. (2009). Managerial and Cost Accounting. Bookboon.com. In Chapter 6, "Activity Based Costing," the authors discuss how ABM focuses on process improvement by identifying non-value-added activities. They state, "A non-value-added activity is a production (or service) related activity that does not add value to a product or service... Examples of non-value-added activities include moving, storing, and inspecting." (p. 68).

3. Maher, M., Selto, F., & Maher, M. W. (2008). Cost Management: A Strategic Emphasis. McGraw-Hill/Irwin. Chapter 7 discusses ABM as a tool for continuous improvement, focusing on identifying and eliminating waste. Reorganizing a plant layout to reduce material movement is a key example of an ABM-driven decision to eliminate waste.