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What budgeting approach requires managers to justify all operating expenditures from scratch for each new period?

AKaizen Budgeting
BZero-Based Budgeting (ZBB)
CIncremental Budgeting
DFlexible Budgeting

Explanation

* Zero-Based Budgeting (ZBB) starts every period with a zero baseline, requiring justification for every cost item.
* Unlike incremental budgeting, it prevents automatic carry-forward of historic operational inefficiencies.
* Requires substantial administrative effort but provides strong cost control.

Exam Relevance
  • Topic: Managerial Accounting
  • Subtopic: Budgeting Systems
Submitted by: mcqstutor Team More Finance & Accounting MCQs →

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