Final answer:
To incorporate non output-based cost drivers into budgeting, recognize fixed costs like rent, allocate budget towards non-physical sector activities, and plan using an anticipatory approach rather than only past cost and output levels.
Step-by-step explanation:
Non output-based cost drivers can be incorporated into budgeting by acknowledging the effects of fixed and variable costs, and understanding how these costs relate to a company's activities that are not directly tied to production volume. Fixed costs, such as rent, do not fluctuate with the level of production and can be considered as sunk costs in short run decision-making. Budgeting must account for these costs as they are indispensable and must be paid regardless of production levels.
Additionally, as an economy shifts towards non-physical sectors, a bigger portion of the budget could be allocated to activities associated with low-impact, non-physical demands. This involves directing monetary flow towards experiences rather than physical goods, which can be reflected in budgeting strategies. Decision makers can analyze these non output-based drivers and value them appropriately to make informed budgeting decisions that don't simply reflect past costs or output levels, but also the anticipated future state of the company and its market.