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Revision question on activity based costing (ABC)

(A)     XX glass limited has been in operation for the past seven years and manufactures shower doors. Since its establishment, the company has used a traditional overhead absorption costing system. However, the managing director, Peter Kenny, is considering making a change.

Over the past few years, Peter has streamlined the production process and reduced … Read the rest

Revision question on budgeting and disadvantages of activity based budget.

Rolling budget, three levels of budget and Activity-based are among of budgets prepared by different organizations.

(i) Explain the meaning of each of the above types of a budget and clearly indicates conditions appropriate for their applicability.
(ii) Provide two main disadvantages of using the activity-based budget.… Read the rest