For activity flexible budgeting, a cost formula is developed for each
A) overhead item as a function of direct labor hours.
B) activity as a function of activity drivers.
C) activity as a function of resource drivers.
D) overhead item as a function of resource drivers.
E) each activity as a function of direct labor hours.

Question

Quizplus · Accepted Answer

Activity flexible budgeting involves developing a cost formula for each activity as a function of activity drivers. This allows for better control and analysis of costs based on the level of activity performed, rather than using a fixed budget that may not accurately reflect the actual level of activity.

For Activity Flexible Budgeting, a Cost Formula Is Developed for Each