Within which category are the major differences between functional and activity-based budgeting found?
A) direct labour and overhead
B) direct materials and overhead
C) overhead and selling and administration
D) direct materials and selling and administration

Question

Quizplus · Accepted Answer

The major differences between functional and activity-based budgeting are found in the category of overhead and selling and administration. Functional budgeting is based on traditional cost accounting methods and allocates overhead costs to different departments based on predetermined rates, while activity-based budgeting assigns costs based on the actual activities that consume resources. This can result in significant differences in the allocation of overhead costs between the two approaches. Selling and administration costs may also be more closely tied to specific activities in an activity-based budgeting system.

Within Which Category Are the Major Differences Between Functional and Activity-Based