ACCA · Question 20 · Budgeting and control
Section B - Case 1: GreenHarvest
GreenHarvest operates a large-scale organic farm producing two main crops: Quinoa and Kale. The farm is transitioning from traditional absorption costing to Activity-Based Costing (ABC).
As a compromise to Beyond Budgeting, the Finance Director suggests implementing a 'Rolling Budget'.
Which of the following best describes a rolling budget?
Answer options:
A budget that automatically increases by a set percentage every year.
A budget that is continuously updated by adding a new accounting period when the earliest period expires.
A budget that flexes based on the actual volume of crops produced.
A budget where every expense must be justified from scratch each quarter.
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