AllMax Enterprises has begun a new system of allocating costs according to what their employees do,rather than what the company spends.For example,labor expenses are allocated to employee tasks rather than salary and benefits.This practice is referred to as
A)cost accounting.
B)accounting auditing.
C)task accounting.
D)activity-based costing.
E)allocation costing.

Question

Quizplus · Accepted Answer

This practice of allocating costs based on employee tasks, rather than just overall expenses, is referred to as activity-based costing (ABC). It allows for a more accurate understanding of where resources are being used and can help with decision-making processes regarding resource allocation.

AllMax Enterprises Has Begun a New System of Allocating Costs