Activity-Based Budgeting Provides Better Decision-Making Information Than Budgeting Based Solely

question 181

True/False

Activity-based budgeting provides better decision-making information than budgeting based solely on output-based cost drivers (units produced,units sold,or revenues).

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Definitions:

Variable Costs

Expenses that change in proportion to the activity or volume of operations in a business.

Cost-Plus Pricing

A pricing strategy where a fixed percentage or amount is added to the cost of producing a product or service to determine its selling price.

Full Cost

The total cost of production that includes both direct and indirect costs, such as raw materials, labor, and overhead.

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of several different investments.