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Activity-Based Management

1. In any type of manufacturing business, there are many cost concerns—some are immediately obvious while others are hidden. If you started a manufacturing business, what type of budget would you choose, static or flexible? Explain why, and include the advantages and drawbacks of your choice.

2. The process of using activity-based costing information to manage a business's activities, and thus its costs, is called activity-based management. How do managers use the information provided by an activity-based costing system?

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http://smallbusiness.chron.com/would-company-flexible-budget-variance-informative-34699.html

1. In any type manufacturing business, there are many cost concerns—some are immediately obvious while others are hidden. If you started a manufacturing business, what type of budget would you choose, static or flexible? Explain why, and include the advantages and drawbacks of your choice.

I would choose a flexible budget because of the fact that static budgets are basically predicated upon estimations of what is needed when the business cycle initially starts. Therefore, the budget is initially created to address expected production figures and to cover projected operational fees. Therefore, as a new business owner who is starting a manufacturing business, it would be more beneficial to begin with a static budget but ...

Solution Summary

This solution discusses activity-based management in a manufacturing business.

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