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

No Comments