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activity based budgeting

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Financial Dictionary

Activity Based Budgeting - ABB

A method of budgeting in which activities that incur costs in each function of an organization are established and relationships are defined between activities. This information is then used to decide how much resource should be allocated to each activity.

Investopedia Commentary

Basically, ABB is budgeting by activities rather than by cost elements.

See also: Budget, Zero-Based Budgeting

Also spelled: ABB

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