Budgeting Based on Cost for Specific Activities Is a Key

question 74

True/False

Budgeting based on cost for specific activities is a key building block of the master budget for companies that use the Kaizen approach.

---

Definitions:

Actual Cost

The true cost incurred to produce a good or deliver a service, including all direct and indirect expenses.

Cost Variances

Cost variances refer to the difference between the expected (budgeted) costs and the actual costs incurred during a specific period.

Management

The process of planning, organizing, leading, and controlling resources to achieve specific goals.

Exception

A deviation from the norm or a case that does not follow the general rule.