Activity-Based Budgeting Builds a Budget for Each Activity Based on the Resources

question 168

True/False

Activity-based budgeting builds a budget for each activity based on the resources needed to provide the required activity output levels.

---

Definitions:

Variable Costs

Costs that vary directly with the level of production or sales volume, such as materials and labor.

Fixed Costs

Costs that do not change with the amount of goods or services produced, such as rent, salaries, and insurance premiums.

Depreciation

An accounting method of allocating the cost of a tangible asset over its useful life.

Sales Price

The total cost that a consumer incurs to buy a product or service from a merchant.