1. IBM implements ABC for its support activities: Information Technology ($5,000,000, 800 projects), Human Resources ($3,000,000, 500 employees), Marketing ($2,500,000, 1,500 campaigns).
   • Requirements:
     • Apply the revenue recognition principle to determine when IBM should recognize revenue related to support activities.
     • Calculate the activity rate for each support activity considering revenue recognition timelines.
     • Allocate costs to different business units based on activity usage and revenue recognition principles.
     • Analyze the cost-effectiveness of each support activity with respect to revenue recognition.
     • Recommend improvements in resource allocation and revenue recognition practices based on ABC insights.