Which of the following statements about activity-based budgeting (ABB) is incorrect?
A) ABB is based on the estimated cost of activities, while conventional budgeting is based on estimated costs of line items.
B) ABB starts with estimating the costs of resources, while conventional costing starts with estimating sales.
C) ABB is generally a more accurate planning tool than conventional budgeting.
D) ABB focuses on resource consumption rather than resource acquisition.

Question

Quizplus · Accepted Answer

ABB starts with estimating the costs of activities and their drivers, not just resources, while conventional budgeting typically starts with estimating sales or overall expenses.

Which of the Following Statements About Activity-Based Budgeting (ABB) Is