5.23 Activity-based budgeting LO4 Data Processors provides credit card services for the banking industry. It is preparing its budget for 2016, and, as it has been using activity-based costing, it intends to develop an activity-based budget for 2016. The table below provides the actual cost driver rate for 2015, and the expected activity levels for 2016. + Activity (cost driver) Transaction processing (number of transactions) Statements (number of statements) $ 0.40 2015 Actual cost driver rate 2016 Expected activity non-business customers 2016 Expected activity business customers 5 000 000 20 000 000 4.00 200 000 750 000 New credit cards (number of credit cards) 5.00 100 000 500 000 Billing disputes (number of disputes) 30.00 50 000 100 000 Required (a) What is the budget for the activities for 2016? (b) Previously, Data Processors used a traditional line-item budget. What benefits will the organisation gain by converting to the activity-based budget? (c) How will the activity-based budget assist in reducing costs in the future