The major differences between activity-based budgeting and traditional budgeting are found in
A) the materials and labor categories.
B) the sales and production budgets.
C) the cash budget.
D) the overhead and selling and administrative categories.
E) None of these.

Question

Quizplus · Accepted Answer

Activity-based budgeting focuses on allocating overhead costs to specific activities, while traditional budgeting typically lumps all overhead costs together. This means that the overhead and selling and administrative categories will be handled differently in the two types of budgeting. The other options listed are not necessarily major differences between the two methods.

The Major Differences Between Activity-Based Budgeting and Traditional Budgeting Are