Q1. Activity-based costing (ABC) is said to result in improved costing accuracy when compared with traditional costing procedures. Briefly explain how this improved accuracy is attained.

Q2. A senior manager was frustrated with the budgeting process and made the following comment: "The whole budgeting process is a waste of time. I would rather my managers and finance staff focus on improving the business than spend time putting together detailed budgeting schedules".

Discuss the statement above, developing an argument for and against spending time putting together detailed budgeting schedules rather than improving the business. Which of these two arguments is most compelling to you?