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Definition of Activity-based budgeting
A method of budgeting that develops budgets based on expected activities and cost drivers – see also activity-based costing.
activity-based budgeting (ABB)
planning approach applying activity drivers to estimate the levels and costs of activities necessary to provide the budgeted quantity and
Asset activity ratios
Ratios that measure how effectively the firm is managing its assets.
Methods of financing in which lenders and equity investors look principally to the
The process of choosing the firm's long-term capital assets.
A method of costing that uses cost pools to accumulate the cost of significant business activities and then assigns the costs from the cost pools to products or services based on cost drivers.
Allocation base A measure of activity or volume such as labour
hours, machine hours or volume of production
Planning, programming and budgeting system (PPBS)
A method of budgeting in which budgets are allocated to projects or programmes rather than to responsibility centres.
A budget that allocates funds in line with strategies.
A variety of approaches that emphasize increasing shareholder value as the primary goal of every business.
A method of budgeting that ignores historical budgetary allocations and identifies the costs that are necessary to implement agreed strategies.
activity based costing (ABC)
A relatively new method advocated for the
Refers generally to analysis procedures for ranking
The process of ranking and selecting investment alternatives and
a repetitive action performed in fulfillment of business functions
the process of detailing the various repetitive actions that are performed in making a product or
activity-based costing (ABC)
a process using multiple cost drivers to predict and allocate costs to products and services;
activity-based management (ABM)
a discipline that focuses on the activities incurred during the production/performance process as the way to improve the value received
a segment of the production or service
a measure of the demands on activities and,
attribute-based costing (ABC II)
an extension of activitybased costing using cost-benefit analysis (based on increased customer utility) to choose the product attribute
the process of formalizing plans and committing
an activity that is necessary for the operation of the business but for which a customer would not want to pay
a process of evaluating an entity’s proposed
a process in which there is a rolling
non-value-added (NVA) activity
an activity that increases the time spent on a product or service but that does not increase its worth or value to the customer
an approach to budgeting that relates
value-added (VA) activity
an activity that increases the worth of the product or service to the customer
a comprehensive budgeting process
Activity-based costing (ABC)
A cost allocation system that compiles costs and assigns
The series of steps one follows when justifying the decision to purchase
capital budgeting decision
Decision as to which real assets the firm should acquire.
Loans granted usually by a financial institution where the asset being financed constitutes the sole security given to the lender.
Life insurance or annuity product in which the cash value and benefit level fluctuate according to the performance of an equity portfolio.
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