Where are the major differences found between activity-based budgeting and traditional budgeting?
A) in the cash budget
B) in the sales and production budgets
C) in the materials and labour categories
D) in the overhead and selling and administrative categories

Question

Quizplus · Accepted Answer

The major differences between activity-based budgeting and traditional budgeting are found in the overhead and selling and administrative categories. Activity-based budgeting focuses on the cost drivers and activities that add value to the organization, whereas traditional budgeting relies on historical data and departmental budgets. Therefore, the overhead and selling and administrative categories are likely to be more accurately allocated and captured in activity-based budgeting compared to traditional budgeting. The other options (A, B, and C) may also have some differences but are not the primary areas where activity-based budgeting differs from traditional budgeting.

Where Are the Major Differences Found Between Activity-Based Budgeting and Traditional