Activity Based Budgeting – NBC Institute

MI – May 2023 – L1 – SA – Q3 – Budgeting

This question asks for the name of the budgeting method that analyses activities thoroughly to predict costs.

Question

A budgeting method where activities are analysed thoroughly to predict costs is known as:
A. Cost based budgeting
B. Production based budgeting
C. Market focussed budgeting
D. Activity based budgeting
E. Raw materials based budgeting

Answer

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Tags: Activity Based Budgeting, Budgeting, Cost Analysis
Level: Level 1

Topic: Budgeting
Series: MAY 2023

MA – May 2018 – L2 – Q2b – Budgetary Control

Explain and provide examples of Activity Based Budgeting, Zero Based Budgeting, and Rolling Budgeting in a memorandum format.

Question

The Sales Director has recently attended a course entitled ‘Finance for Non-Accounting Managers’. He wants to understand more about a number of management accounting terms that he feels may be relevant to him.

Required:
Prepare a memorandum explaining and providing examples of the following:
i) Activity Based Budgeting
ii) Zero Based Budgeting
iii) Rolling Budgeting

Answer

Find Related Questions by Tags, levels, etc.

Tags: Activity Based Budgeting, Budgeting Methods, Finance for Non-Accounting Managers, Rolling Budgeting, Zero-Based Budgeting
Level: Level 2

Topic: Budgetary control
Series: MAY 2018

MA – May 2018 – L2 – Q2a – Performance analysis

Analyze a survey comparing attitudes towards Japanese and German cars based on service, economy, reliability, and comfort.

Question

Diligence Research Ltd, a research and advocacy company, has undertaken an attitude survey of recent buyers of particular brands of cars in Ghana. As part of this study, recent buyers of Japanese cars and recent buyers of German cars were asked to agree or disagree with a number of statements. They were asked to choose only one out of the four options and indicate whether they agree or disagree. One of the summary tables from the survey is shown below.

	Agree	Disagree
Japan cars are:
Easy to get serviced	65	35
Economical	81	19
Reliable	76	24
Comfortable	69	31
German cars are:
Easy to get serviced	32	68
Economical	61	39
Reliable	74	26
Comfortable	85	15

Required:
Analyse the above data highlighting the most significant features of these data. Illustrate your analysis with tables.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Activity Based Budgeting, Attitude Survey, Car Brands, Data Analysis, Management Information Limitations, Rolling Budgeting, Survey Data, Zero-Based Budgeting
Level: Level 2

Topic: Performance analysis
Series: MAY 2018

MA – April 2022 – L2 – Q3b – Activity-based costing

Differentiate between Activity-Based Budgeting and Incremental Budgeting, explain ABB processes, and discuss arguments for and against ABB.

Question

Kankum Industries is considering switching from Incremental Budgeting to Activity-Based Budgeting (ABB) because of the argued pricing specificity of the ABB approach. The Chairman of the Finance Sub-Committee of the board, who does not have an accounting background, has contacted you for clarification on some key issues relating to ABB in order to assist in his explanation to the board.

Required:

i) Differentiate between Activity-Based Budgeting and Incremental Budgeting. (3 marks)

ii) Explain the process in ABB. (3 marks)

iii) State TWO (2) arguments in favour and TWO (2) arguments against ABB. (4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Activity Based Budgeting, Budgeting Process, Incremental Budgeting
Level: Level 2

Topic: Activity-based costing
Series: APR 2023

PSAF – Nov 2017 – L2 – Q3a – Public Sector Fiscal Planning and Budgeting

Distinguishing between Activity-Based Budgeting and Programme-Based Budgeting and explaining the advantages of Programme-Based Budgeting.

Question

The Minister of Finance is mandated by law to develop a budgetary system throughout the public sector. Recently, the government has moved away from Activity-Based Budgeting to Programme-Based Budgeting system for many reasons.

Required: i) Distinguish between Activity-Based Budgeting and Programme-Based Budgeting. (4 marks)

ii) Explain FOUR advantages that Programme-Based Budgeting has over the Activity-Based Budgeting. (8 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Activity Based Budgeting, Budgeting, Programme-Based Budgeting, Public Sector
Level: Level 2

Topic: Public sector fiscal planning and budgeting
Series: NOV 2017

IMAC – JULY 2023 – L1 – Q2 – Budgeting | Marginal Costing and Absorption Costing

Explain types of budgeting and prepare a flexible budget for cost control, including variance analysis.

Question

a) Explain the following:
i) Incremental Budgeting (2 marks)
ii) Zero-Based Budgeting (2 marks)
iii) Activity-Based Budgeting (2 marks)

b) Cox Ltd is a manufacturing company that produces a body shaping drink for the African market. The company employs a marginal costing system as an integral part of its reporting systems. During the reporting period, there was no opening or closing inventory. The company produces its budgeted and actual results for December 31, 2022, as follows:

	Budget	Actual
Production/sales (units)	2,000	1,400
Sales (GH¢)	60,000	42,400
Variable Costs:
Direct material (GH¢)	(20,000)	(13,200)
Direct labour (GH¢)	(10,000)	(7,600)
Variable overhead (GH¢)	(6,000)	(4,400)
Contribution (GH¢)	24,000	17,200
Fixed cost (GH¢)	(20,000)	(20,800)
Net profit/loss (GH¢)	4,000	(3,600)

Required:
Prepare a budget that will be useful for management cost control purposes and briefly comment on the company’s performance in December 2022. (14 marks)

Answer

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Tags: Activity Based Budgeting, Cost Control, Flexible Budget, Incremental Budgeting, Zero-Based Budgeting
Level: Level 1

Topic: Budgeting, Marginal Costing and Absorption Costing
Series: JULY 2023

IMAC – MAY 2021 – L1 – Q2 – Budgeting | Cost and Cost Behaviour | Relevant Cost and Revenue

QR activity-based budgeting system for products Q and R, and working capital calculation for a company.

Question

a) QR uses an activity based budgeting (ABB) system to budget product cost. It manufactures two products, product Q and product R. The budget details for these two products for the forthcoming period are as follows:

	Product Q	Product R
Budgeted production (units)	80,000	120,000
Number of machine setups per batch	4	3
Batch size (Units)	5,000	4,000

The total budget cost of setting up the machine is GH¢74,400.

Required: i) State and explain THREE (3) objectives of budgeting. (6 marks)

ii) Calculate the budgeted machine setup cost per unit of product Q and R. (5 marks)

iii) State THREE (3) benefits and TWO (2) limitations of using an activity-based budgeting system. (5 marks)

b) A company has annual sales revenues of GH¢30 million and the following working capital periods:

Period	Months
Inventory conversion period	2.5
Accounts receivable collection period	2.0
Accounts payable payment period	1.5

Production costs represent 70% of sales revenue.

Required: Calculate the total amount held in working capital excluding cash and cash equivalents. (4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Activity Based Budgeting, Irrelevant Costs, Machine Setup Costs, Management Information Systems, Objectives of Budgeting, Relevant Costs, Working Capital
Level: Level 1

Topic: Budgeting, Cost and Cost Behaviour, Relevant Cost and Revenue
Series: MAY 2021

MI – May 2023 – L1 – SA – Q3 – Budgeting

This question asks for the name of the budgeting method that analyses activities thoroughly to predict costs.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Activity Based Budgeting, Budgeting, Cost Analysis
Level: Level 1

Topic: Budgeting
Series: MAY 2023

MA – May 2018 – L2 – Q2b – Budgetary Control

Explain and provide examples of Activity Based Budgeting, Zero Based Budgeting, and Rolling Budgeting in a memorandum format.

Question

Required:
Prepare a memorandum explaining and providing examples of the following:
i) Activity Based Budgeting
ii) Zero Based Budgeting
iii) Rolling Budgeting

Answer

Find Related Questions by Tags, levels, etc.

Tags: Activity Based Budgeting, Budgeting Methods, Finance for Non-Accounting Managers, Rolling Budgeting, Zero-Based Budgeting
Level: Level 2

Topic: Budgetary control
Series: MAY 2018

MA – May 2018 – L2 – Q2a – Performance analysis

Analyze a survey comparing attitudes towards Japanese and German cars based on service, economy, reliability, and comfort.

Question

	Agree	Disagree
Japan cars are:
Easy to get serviced	65	35
Economical	81	19
Reliable	76	24
Comfortable	69	31
German cars are:
Easy to get serviced	32	68
Economical	61	39
Reliable	74	26
Comfortable	85	15

Required:
Analyse the above data highlighting the most significant features of these data. Illustrate your analysis with tables.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Activity Based Budgeting, Attitude Survey, Car Brands, Data Analysis, Management Information Limitations, Rolling Budgeting, Survey Data, Zero-Based Budgeting
Level: Level 2

Topic: Performance analysis
Series: MAY 2018

MA – April 2022 – L2 – Q3b – Activity-based costing

Differentiate between Activity-Based Budgeting and Incremental Budgeting, explain ABB processes, and discuss arguments for and against ABB.

Question

Required:

i) Differentiate between Activity-Based Budgeting and Incremental Budgeting. (3 marks)

ii) Explain the process in ABB. (3 marks)

iii) State TWO (2) arguments in favour and TWO (2) arguments against ABB. (4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Activity Based Budgeting, Budgeting Process, Incremental Budgeting
Level: Level 2

Topic: Activity-based costing
Series: APR 2023

PSAF – Nov 2017 – L2 – Q3a – Public Sector Fiscal Planning and Budgeting

Distinguishing between Activity-Based Budgeting and Programme-Based Budgeting and explaining the advantages of Programme-Based Budgeting.

Question

Required: i) Distinguish between Activity-Based Budgeting and Programme-Based Budgeting. (4 marks)

ii) Explain FOUR advantages that Programme-Based Budgeting has over the Activity-Based Budgeting. (8 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Activity Based Budgeting, Budgeting, Programme-Based Budgeting, Public Sector
Level: Level 2

Topic: Public sector fiscal planning and budgeting
Series: NOV 2017

IMAC – JULY 2023 – L1 – Q2 – Budgeting | Marginal Costing and Absorption Costing

Explain types of budgeting and prepare a flexible budget for cost control, including variance analysis.

Question

a) Explain the following:
i) Incremental Budgeting (2 marks)
ii) Zero-Based Budgeting (2 marks)
iii) Activity-Based Budgeting (2 marks)

	Budget	Actual
Production/sales (units)	2,000	1,400
Sales (GH¢)	60,000	42,400
Variable Costs:
Direct material (GH¢)	(20,000)	(13,200)
Direct labour (GH¢)	(10,000)	(7,600)
Variable overhead (GH¢)	(6,000)	(4,400)
Contribution (GH¢)	24,000	17,200
Fixed cost (GH¢)	(20,000)	(20,800)
Net profit/loss (GH¢)	4,000	(3,600)

Required:
Prepare a budget that will be useful for management cost control purposes and briefly comment on the company’s performance in December 2022. (14 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Activity Based Budgeting, Cost Control, Flexible Budget, Incremental Budgeting, Zero-Based Budgeting
Level: Level 1

Topic: Budgeting, Marginal Costing and Absorption Costing
Series: JULY 2023

IMAC – MAY 2021 – L1 – Q2 – Budgeting | Cost and Cost Behaviour | Relevant Cost and Revenue

QR activity-based budgeting system for products Q and R, and working capital calculation for a company.

Question

	Product Q	Product R
Budgeted production (units)	80,000	120,000
Number of machine setups per batch	4	3
Batch size (Units)	5,000	4,000

The total budget cost of setting up the machine is GH¢74,400.

Required: i) State and explain THREE (3) objectives of budgeting. (6 marks)

ii) Calculate the budgeted machine setup cost per unit of product Q and R. (5 marks)

iii) State THREE (3) benefits and TWO (2) limitations of using an activity-based budgeting system. (5 marks)

b) A company has annual sales revenues of GH¢30 million and the following working capital periods:

Period	Months
Inventory conversion period	2.5
Accounts receivable collection period	2.0
Accounts payable payment period	1.5

Production costs represent 70% of sales revenue.

Required: Calculate the total amount held in working capital excluding cash and cash equivalents. (4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Activity Based Budgeting, Irrelevant Costs, Machine Setup Costs, Management Information Systems, Objectives of Budgeting, Relevant Costs, Working Capital
Level: Level 1

Topic: Budgeting, Cost and Cost Behaviour, Relevant Cost and Revenue
Series: MAY 2021

Question Tag: Activity Based Budgeting

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MI – May 2023 – L1 – SA – Q3 – Budgeting

This question asks for the name of the budgeting method that analyses activities thoroughly to predict costs.

MA – May 2018 – L2 – Q2b – Budgetary Control

Explain and provide examples of Activity Based Budgeting, Zero Based Budgeting, and Rolling Budgeting in a memorandum format.

MA – May 2018 – L2 – Q2a – Performance analysis

Analyze a survey comparing attitudes towards Japanese and German cars based on service, economy, reliability, and comfort.

MA – April 2022 – L2 – Q3b – Activity-based costing

Differentiate between Activity-Based Budgeting and Incremental Budgeting, explain ABB processes, and discuss arguments for and against ABB.

PSAF – Nov 2017 – L2 – Q3a – Public Sector Fiscal Planning and Budgeting

Distinguishing between Activity-Based Budgeting and Programme-Based Budgeting and explaining the advantages of Programme-Based Budgeting.

IMAC – JULY 2023 – L1 – Q2 – Budgeting | Marginal Costing and Absorption Costing

Explain types of budgeting and prepare a flexible budget for cost control, including variance analysis.

IMAC – MAY 2021 – L1 – Q2 – Budgeting | Cost and Cost Behaviour | Relevant Cost and Revenue

QR activity-based budgeting system for products Q and R, and working capital calculation for a company.

MI – May 2023 – L1 – SA – Q3 – Budgeting

This question asks for the name of the budgeting method that analyses activities thoroughly to predict costs.

MA – May 2018 – L2 – Q2b – Budgetary Control

Explain and provide examples of Activity Based Budgeting, Zero Based Budgeting, and Rolling Budgeting in a memorandum format.

MA – May 2018 – L2 – Q2a – Performance analysis

Analyze a survey comparing attitudes towards Japanese and German cars based on service, economy, reliability, and comfort.

MA – April 2022 – L2 – Q3b – Activity-based costing

Differentiate between Activity-Based Budgeting and Incremental Budgeting, explain ABB processes, and discuss arguments for and against ABB.

PSAF – Nov 2017 – L2 – Q3a – Public Sector Fiscal Planning and Budgeting

Distinguishing between Activity-Based Budgeting and Programme-Based Budgeting and explaining the advantages of Programme-Based Budgeting.

IMAC – JULY 2023 – L1 – Q2 – Budgeting | Marginal Costing and Absorption Costing

Explain types of budgeting and prepare a flexible budget for cost control, including variance analysis.

IMAC – MAY 2021 – L1 – Q2 – Budgeting | Cost and Cost Behaviour | Relevant Cost and Revenue

QR activity-based budgeting system for products Q and R, and working capital calculation for a company.

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Question Tag: Activity Based Budgeting

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MI – May 2023 – L1 – SA – Q3 – Budgeting

This question asks for the name of the budgeting method that analyses activities thoroughly to predict costs.

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MA – May 2018 – L2 – Q2b – Budgetary Control

Explain and provide examples of Activity Based Budgeting, Zero Based Budgeting, and Rolling Budgeting in a memorandum format.

You're reporting an error for "MA – May 2018 – L2 – Q2b – Budgetary Control"

MA – May 2018 – L2 – Q2a – Performance analysis

Analyze a survey comparing attitudes towards Japanese and German cars based on service, economy, reliability, and comfort.

You're reporting an error for "MA – May 2018 – L2 – Q2a – Performance analysis"

MA – April 2022 – L2 – Q3b – Activity-based costing

Differentiate between Activity-Based Budgeting and Incremental Budgeting, explain ABB processes, and discuss arguments for and against ABB.

You're reporting an error for "MA – April 2022 – L2 – Q3b – Activity-based costing"

PSAF – Nov 2017 – L2 – Q3a – Public Sector Fiscal Planning and Budgeting

Distinguishing between Activity-Based Budgeting and Programme-Based Budgeting and explaining the advantages of Programme-Based Budgeting.

You're reporting an error for "PSAF – Nov 2017 – L2 – Q3a – Public Sector Fiscal Planning and Budgeting"

IMAC – JULY 2023 – L1 – Q2 – Budgeting | Marginal Costing and Absorption Costing

Explain types of budgeting and prepare a flexible budget for cost control, including variance analysis.

You're reporting an error for "IMAC – JULY 2023 – L1 – Q2 – Budgeting | Marginal Costing and Absorption Costing"

IMAC – MAY 2021 – L1 – Q2 – Budgeting | Cost and Cost Behaviour | Relevant Cost and Revenue

QR activity-based budgeting system for products Q and R, and working capital calculation for a company.

You're reporting an error for "IMAC – MAY 2021 – L1 – Q2 – Budgeting | Cost and Cost Behaviour | Relevant Cost and Revenue"

MI – May 2023 – L1 – SA – Q3 – Budgeting

This question asks for the name of the budgeting method that analyses activities thoroughly to predict costs.

You're reporting an error for "MI – May 2023 – L1 – SA – Q3 – Budgeting"

MA – May 2018 – L2 – Q2b – Budgetary Control

Explain and provide examples of Activity Based Budgeting, Zero Based Budgeting, and Rolling Budgeting in a memorandum format.

You're reporting an error for "MA – May 2018 – L2 – Q2b – Budgetary Control"

MA – May 2018 – L2 – Q2a – Performance analysis

Analyze a survey comparing attitudes towards Japanese and German cars based on service, economy, reliability, and comfort.

You're reporting an error for "MA – May 2018 – L2 – Q2a – Performance analysis"

MA – April 2022 – L2 – Q3b – Activity-based costing

Differentiate between Activity-Based Budgeting and Incremental Budgeting, explain ABB processes, and discuss arguments for and against ABB.

You're reporting an error for "MA – April 2022 – L2 – Q3b – Activity-based costing"

PSAF – Nov 2017 – L2 – Q3a – Public Sector Fiscal Planning and Budgeting

Distinguishing between Activity-Based Budgeting and Programme-Based Budgeting and explaining the advantages of Programme-Based Budgeting.

You're reporting an error for "PSAF – Nov 2017 – L2 – Q3a – Public Sector Fiscal Planning and Budgeting"

IMAC – JULY 2023 – L1 – Q2 – Budgeting | Marginal Costing and Absorption Costing

Explain types of budgeting and prepare a flexible budget for cost control, including variance analysis.

You're reporting an error for "IMAC – JULY 2023 – L1 – Q2 – Budgeting | Marginal Costing and Absorption Costing"

IMAC – MAY 2021 – L1 – Q2 – Budgeting | Cost and Cost Behaviour | Relevant Cost and Revenue

QR activity-based budgeting system for products Q and R, and working capital calculation for a company.

You're reporting an error for "IMAC – MAY 2021 – L1 – Q2 – Budgeting | Cost and Cost Behaviour | Relevant Cost and Revenue"

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