Fairmont Inc. uses an accounting system that charges costs to the manager who has been delegated the authority to make decisions concerning the costs. For example, if the sales manager accepts a rush order that will result in higher than normal manufacturing costs, these additional costs are charged to the sales manager because the authority to accept or decline the rush order was given to the sales manager. This type of accounting system is known as:

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This type of accounting system is known as responsibility accounting, where costs are charged to the manager who has the responsibility to make decisions that incur those costs. This system allows for better accountability and motivates managers to make prudent decisions that consider the costs and benefits of their decisions.