A budget system based on expected activities and their levels that enables management to plan for resources required to perform the activities is:
A) Traditional budgeting.
B) Management budgeting.
C) Master budgeting.
D) Activity-based budgeting.
E) Cash budgeting.

Question

Quizplus · Accepted Answer

Activity-based budgeting is a budget system that is based on expected activities and their levels. It enables management to plan for resources required to perform the activities. This budgeting method is different from traditional budgeting, which focuses on historical patterns and uses those patterns to predict future spending. Activity-based budgeting, on the other hand, is more accurate because it is based on expected activities and their levels. The other options, management budgeting, master budgeting, and cash budgeting, do not specifically rely on activity levels for budgeting.

A Budget System Based on Expected Activities and Their Levels