A company that uses activity-based budgeting performs the following: (1) plans activities for the budget period; (2) forecasts the demand for products and services as well as the customers to be served; (3) budgets the resources necessary to carry out activities. Which of the following denotes the proper order of the preceding activities?

Question

Quizplus · Accepted Answer

The first step in activity-based budgeting is to forecast the demand for products and services as well as the customers to be served (Step 2), as this forms the basis for the subsequent planning of activities (Step 1). Once the activities have been planned, the resources necessary to carry them out can then be budgeted (Step 3). Therefore, the correct order of activities is 2-1-3.

A Company That Uses Activity-Based Budgeting Performs the Following: (1)