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Q. Show the Activity based budgeting?
Activity based budgeting (ABB) uses cost 'drivers' for different support resources consumed e.g. machining, quality control or administration support, in other words cost levels are forecast and determined by using activity based costing (ABC). ABB therefore should produce more accurate budgeted figures against which actual costs can be compared to report more meaningful variances.
Rolling or continuous budgeting is when the budget is updated and revised on a regular and frequent basis. The method is to add a further period immediately to the budget when an earlier period has expired, for example if Jan to Mar 2010 is the first three months of a yearly forecast, once this period has expired then Jan to Mar 2011 will be added. Regular assessment and amendment keeps the budget forecast accurate.
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