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QR uses an activity based budgeting (ABB) system to budget product costs. It manufactures two products, product Q and product R. The budget details for these two products for the forthcoming period are as follows:
The total budgeted cost of setting up the machines is $74,400.
Select TWO potential benefits of using an activity based budgeting system.
Suggested Answer: C
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30 comments · newest first
DE
Delila
11 months ago
Definitely see the benefits of identifying value added activities!
EV
Eveline
11 months ago
Not sure about option B, seems a bit vague to me.
VI
Virgilio
11 months ago
Surprised that ABB can link turnover to activity levels, sounds complicated!
MA
Margot
12 months ago
I think option D is spot on, cuts should hit non-value added stuff.
GL
Glory
12 months ago
ABB helps prioritize activities, totally agree!
CH
Chana
1 year ago
I think option C might be relevant too, but I’m leaning more towards A and D for the benefits. It’s tricky to remember all the details!
BE
Berry
1 year ago
I’m a bit uncertain about the benefits of ABB. I thought option B sounded good, but I can't recall if it really connects turnover to activity levels.
KA
Kara
1 year ago
I feel like option D is definitely a benefit since it focuses on cutting non-value added activities. I think I’ve seen a similar question in practice exams.
MA
Margery
1 year ago
I remember discussing how ABB helps prioritize activities, so I think option A makes sense. But I'm not entirely sure about the second choice.
EL
Elin
1 year ago
I'm confident I can handle this. Activity-based budgeting allows you to prioritize activities and allocate resources effectively, which is a major benefit. The other option about identifying value-added activities is also important.
SO
Sommer
1 year ago
Okay, I see the key is to focus on the benefits of activity-based budgeting specifically. Options A and D seem the most relevant to me.
CA
Cammy
1 year ago
Hmm, I'm a bit unsure about this one. The options seem similar, I'll need to carefully read through each one to determine the two key benefits.
FR
Freeman
1 year ago
This question seems straightforward, I think I can identify the two main benefits of activity-based budgeting from the options provided.
JA
Jaclyn
1 year ago
I'm a little confused by the wording of some of these options. I'll need to re-read them a few times to make sure I fully understand the differences between them before selecting the two best benefits.
JU
Justine
1 year ago
Hmm, I'm a bit unsure about this one. The question mentions high availability, so I'm wondering if options A or B with EC2 might be better for that. But the cost-effectiveness requirement makes me lean towards C or D. I'll need to think this through a bit more.
LO
Louisa
1 year ago
I vaguely remember BFD being important for link failover, but I'm not entirely sure if it's the right answer for resiliency.
MA
Malcolm
1 year ago
I'm just glad they didn't include an option about using ABB to communicate with aliens or something. You know there's always that one weird answer choice on these exams!
CH
Chantay
1 year ago
B) Activity based budgeting provides a clear framework for understanding the link between turnover and the level of activity.
GA
Gaston
1 year ago
A) Activity based budgeting allows the ranking of activities and the determination of how limited resources should be allocated across competing activities.
CH
Cheryl
1 year ago
Haha, I bet the person who wrote option B has never actually used an ABB system. 'Clear framework for understanding turnover'? Yeah, right!
PA
Paz
1 year ago
I agree, A and D are the correct answers. ABB gives you a more granular view of your costs and allows you to make targeted budget cuts, which is super important in today's business climate.
LU
Ludivina
1 year ago
ABB definitely provides a clear framework for understanding the link between turnover and activity levels. It's a valuable tool for budgeting product costs.
BE
Bernardine
1 year ago
Yes, ABB is great for allocating resources efficiently and ensuring budget cuts are made to non-value added activities.
EL
Elvis
1 year ago
I think A and D are the best options. ABB helps in identifying value added activities and making targeted budget cuts.
FL
Flo
2 years ago
A and D seem like the most relevant benefits. Activity-based budgeting helps prioritize activities and identify value-added vs non-value-added costs, which is crucial for effective resource allocation.
TR
Trevor
1 year ago
Yes, activity based budgeting helps in prioritizing activities and ensuring resources are allocated efficiently.
TR
Trevor
1 year ago
I agree, A and D are definitely important benefits of using an activity based budgeting system.
MA
Maryanne
2 years ago
I believe B could also be a potential benefit. Understanding the link between turnover and activity level is crucial for effective budgeting.
NI
Nicholle
2 years ago
I agree with you, Leonard. A and D make sense because they help in allocating resources efficiently and identifying non-value added activities.
LE
Leonard
2 years ago
I think the potential benefits of using an activity based budgeting system are A and D.