Activity-based budgeting is a budget system based on expected activities and their levels for the budget period,which helps management plan for the resources required.

Activity-based budgeting is a budget system that focuses on identifying and planning for the specific activities and resources required to achieve organizational goals. This approach is different from traditional budgeting methods that simply allocate funds to departments based on historical spending or arbitrary percentages. Instead, activity-based budgeting involves analyzing past performance, forecasting future needs, and setting priorities based on the most efficient and effective use of resources.