A recent approach to management accounting that corrects many of the deficiencies of traditional accounting systems is called:
A)appreciation-based costing.
B)activity-based costing.
C)activity-biased counting.
D)allocation-based charging.

Question

Quizplus · Accepted Answer

Activity-based costing (ABC) is a recent approach to management accounting that aims to allocate costs more accurately by identifying and analyzing the activities required to produce a product or service. Unlike traditional accounting systems, which tend to allocate costs based on a single cost driver such as direct labor hours or machine hours, ABC recognizes that different activities have different levels of cost causality and assigns costs accordingly. This provides a more accurate picture of the true costs of producing a product or service and helps managers to make better-informed decisions.

A Recent Approach to Management Accounting That Corrects Many of the Deficiencies