Final answer:
Activity-based budgeting and kaizen budgeting are not equivalent in meaning; the former focuses on cost allocation based on activities while the latter integrates continuous improvements within the budgeting process.The statement given is False
Step-by-step explanation:
The statement that activity-based budgeting and kaizen budgeting are really equivalent in meaning is FALSE. While both are budgeting methods used in management accounting to improve financial performance and efficiency, they have distinct methodologies and principles.
Activity-based budgeting (ABB) is a method where activities that incur costs are analyzed and budgeted. The ABB process involves identifying and understanding various business activities, assessing their cost drivers, and allocating resources accordingly. It aims at creating a more streamlined and cost-effective budget by focusing on activities that add value to the company.
On the other hand, kaizen budgeting is a budgeting process that is influenced by the Japanese philosophy of 'kaizen', which means 'continuous improvement'. Kaizen budgeting incorporates continuous improvement into the budgeting process. Costs are not merely rolled over from prior periods; instead, they are critically evaluated with an eye towards continual decreases and efficiency improvements over time.