"I have to help my operations manager reduce expenses," said Oliver, "but my expense categories-salaries, fringes, supplies, and fixed costs-are too general to give me guidance." Candice, his accounting supervisor, said, "Let me show you a different approach, so that you can develop data that will identify areas for expense reduction. I suggest that you use ________. It will identify streams of activity to which you can then allocate costs across particular business processes according to the time employees devote to those activities."
A) sales forecasting
B) production costing
C) activity-based costing
D) capital costing
E) operational costing

Question

Quizplus · Accepted Answer

Candice suggests using activity-based costing to identify specific activities and allocate costs accordingly. This will provide a more detailed picture of where expenses are being incurred and help to identify areas for reduction. Sales forecasting, production costing, capital costing, and operational costing do not provide the same level of granularity and detail as activity-based costing.

"I Have to Help My Operations Manager Reduce Expenses," Said