Palin Inc Has Started a New System of Allocating Costs According

question 17

Multiple Choice

Palin Inc. has started 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.

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Definitions:

Variable Costs

Expenses that change in proportion to the activity of a business such as costs for raw materials or production labor.

Snow-clearing

The process of removing snow and ice from outdoor surfaces, primarily roads and pavements, to ensure safe passage for vehicles and pedestrians.

Perfectly Competitive

A market structure characterized by a large number of small firms, identical products sold by all firms, no barriers to entry or exit, and perfect information among buyers and sellers.

Marginal Cost

It refers to the cost change associated with producing an extra unit of a good or service, important in economic decision-making.