The name Acme became popular for businesses by the 1920s, when alphabetized business telephone directories such as the Yellow Pages began to be widespread. There was a flood of businesses named Acme, including Acme Brick, Acme Markets, and Acme Boots. Early Sears catalogues even contained a number of products with the "Acme" trademark, including anvils, which are frequently used in Warner Bros. cartoons.
Warner Brothers animator Chuck Jones has said the name Acme was chosen because of its prevalence:
Since we had to search out our own entertainment, we devised our own fairy stories. If you wanted a bow and arrow you got a stick. If you wanted to conduct an orchestra you got a stick. If you wanted a duel you used a stick. You couldn't go and buy one; that's where the terms acme came from. Whenever we played a game where we had a grocery store or something we called it the ACME corporation. Why? Because in the yellow pages if you looked, say, under drugstores, you'd find the first one would be Acme Drugs. Why? Because "AC" was about as high as you could go; it means the best; the superlative.
— Chuck Jones in a 2009 documentary
The name Acme also had other connotations for people in Los Angeles at the time. The traffic lights in Los Angeles during the time the Warner Bros. cartoons were being made were manufactured by the Acme Traffic Signal Company. The traffic lights paired “Stop” and “Go” semaphore arms with small red and green lights. Bells played the role of today’s amber or yellow lights, ringing when the flags changed—a process that took five seconds. The Acme semaphore traffic lights were often used in Warner Bros. Looney Tunes and Merrie Melodies cartoons for comedic effect due to their loud bell which was often followed by screeching tires and many sight gags.
It is a common misconception that Acme is an acronym standing for such things as "A Company that Makes Everything", "American Companies Make Everything" or "American Company that Manufactures Everything".