Using activity-based costing (ABC) together with zero-based budgeting (ZBB) allows businesses to more accurately budget costs by focusing on key activities and their related inputs, processes, and outputs. ZBB requires building a budget from scratch rather than assuming last year's costs, while ABC identifies the true costs of activities. Together they prompt managers to thoroughly review all planned expenditures and costs based on forecasted activity levels. This drives a better understanding of what truly drives costs in the business.