The Objective of Activity-Based Budgeting Is to Refine the Budgeting

question 75

True/False

The objective of activity-based budgeting is to refine the budgeting process by partitioning indirect costs into different homogeneous activity cost pools.

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Definitions:

Job Costing

A method of costing that assigns expenses to specific jobs or projects.

Direct Labour

The workforce involved directly in manufacturing products or delivering services, whose costs are tied to the production output.

Manufacturing Overhead

Indirect costs associated with manufacturing, such as utilities, maintenance, and factory management salaries.

Job Costing

A costing method that determines the cost of a specific job or project, making it suitable for industries like construction, where products are customized.