The following statements have been made about the drawbacks of activity-based budgeting: (1) It is not always useful or applicable, as in the short term many overhead costs are not controllable and do not vary directly with changes in the volume of activity for the cost driver. (2) ABB will not be able to provide useful information for a total quality management programme (TQM). Which of the above statement(s) is/are true?
A、(1) only
B、(2) only
C、Neither (1) nor (2)
D、Both (1) and (2)
A、(1) only
B、(2) only
C、Neither (1) nor (2)
D、Both (1) and (2)
【参考答案及解析】
(2) is not correct. ABB can provide useful information for a total quality management programme (TQM) by relating the cost of an activity to the level of service provided and asking the user departments if they feel they are getting a cost-effective service.
(2) is not correct. ABB can provide useful information for a total quality management programme (TQM) by relating the cost of an activity to the level of service provided and asking the user departments if they feel they are getting a cost-effective service.