Advanced Traditional budgeting systems are incremental in nature and tend to focus on cost centres. Activity based budgeting links strategic planning to overall performance measurement aiming at continuous improvement.

(a) Explain the weaknesses of an incremental budgeting system.

(b) Describe the main features of an activity based budgeting system and comment on the advantages claimed for its use. (10 marks)
(Total 15 marks) ACCA Paper 9 Information for Control and Decision Making