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NEW QUESTION: 1
There are many different budget techniques or processes that business organizations can employ. One of these techniques or processes is zero-based budgeting, which is
A. Developing budgeted costs from clear-cut measured relationships between inputs and outputs
B. Using the prior year's budget as a base year and adjusting it based on the experiences of the prior year and the expectations for the coming year
C. Budgeting from the ground up as though the budget process were being initiated for the first time.
D. Budgeting for cash inflows and outflows to time investments and borrowings in a way to maintain a bank account with a minimum balance
Answer: C
Explanation:
Zero-based budgeting ZBB) is a planning process in which each manager must justify a department's entire budget every year or period). Under ZBB, a manager must build the budget every year from a base of zero. All expenditures must be justified regardless of the variances from previous years' budgets. The objective is to encourage periodic reexamination of all costs in the hope that some can be reduced or eliminated. Different levels of serve. e work effort) are evaluated for each activity, measures of work and performance are established, and activities are ranked prioritized) according to their importance to the entity. For each budgetary unit, decision packages are prepared that describe various levels of service that may be provided, including at least one lower than the current one.

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