Question

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_______.

Answer 1

activity based costing

Step-by-step explanation:

In activity based costing all the expense are provided as according to the activity status it is concerned to. Basically no expenses are charged simply, Rather they are charged based on the activity they are linked to.

Here also the employee expense are not normally charged to salary head, rather it is charged on some activity and as cost of completing such activity.

As the expense is specifically charged to a specific activity as a costing to it, it is following the activity based costing technique.