Lean systems often rely on a method of overhead allocation known as
A)direct-labor allocation.
B)capital-charge allocation.
C)mixed-model accounting.
D)activity-based costing.
E)indirect-labor allocation.

Question

Quizplus · Accepted Answer

Activity-based costing (ABC) is a method often used in lean systems to allocate overhead costs more accurately based on activities that drive costs, rather than traditional methods based on direct labor or machine hours. This approach helps in identifying and eliminating waste, making it suitable for lean environments.

Lean Systems Often Rely on a Method of Overhead Allocation