Which of the following budgeting systems relies on cost pools and cost drivers?
A) Activity-based budgeting
B) Rolling budgeting
C) Zero-based budgeting
D) Static budgeting

Question

Quizplus · Accepted Answer

Activity-based budgeting relies on identifying cost pools (groups of expenses) and cost drivers (activities or factors that drive those expenses) in order to allocate and budget costs more accurately. Rolling budgeting involves continuously updating and revising budget projections, rather than relying on a fixed budget for a set period of time. Zero-based budgeting involves starting from scratch with each budget cycle, rather than assuming certain expenses will be carried over from the previous cycle. Static budgeting is a traditional budgeting method that uses fixed projections for a specific period of time without taking into account changes in business conditions or actual results. None of these methods directly rely on cost pools and cost drivers except for activity-based budgeting.

Which of the Following Budgeting Systems Relies on Cost Pools