Asked by
Josue Floressantiago
on Oct 23, 2024
Verified
Which of the following statements about activity-based budgeting (ABB) is incorrect?
A) ABB is based on the estimated cost of activities, while conventional budgeting is based on estimated costs of line items.
B) ABB starts with estimating the costs of resources, while conventional costing starts with estimating sales.
C) ABB is generally a more accurate planning tool than conventional budgeting.
D) ABB focuses on resource consumption rather than resource acquisition.
Activity-Based Budgeting (ABB)
A method of budgeting where activities that incur costs in every function of an organization are recorded, analyzed and researched.
Conventional Budgeting
A traditional approach to budgeting that involves planning income and expenditures for a fixed period.
Resource Consumption
The process of using resources such as materials, energy, or time, typically quantified for analysis and optimization in various contexts.
- Detect and fathom the advantages and limitations of a standard costing system.
Verified Answer
CS
Learning Objectives
- Detect and fathom the advantages and limitations of a standard costing system.