Discuss Why Activity-Based Flexible Budgeting Provides a More Accurate Prediction

question 42

Essay

Discuss why activity-based flexible budgeting provides a more accurate prediction of costs than a traditional flexible budget.

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Definitions:

Company Failure

Refers to the cessation of business operations due to financial insolvency, bankruptcy, or inability to sustain operational costs.

Scope of Strategic Fit

Refers to the alignment between an organization's strategies, resources, and capabilities with the external environment to achieve competitive advantage.

Uncertain Demand

The unpredictability of customer demand due to various factors such as market trends, seasonality, and economic conditions.

Supply Chain

A network of businesses and activities involved in the creation and delivery of a product or service from the raw material stage through to the end customer.