Syllabus D: Budgeting — ACCA Practice Question 18

How to approach this question

Understand the definition of ZBB: starting from zero and justifying all costs. This eliminates inefficiencies but takes a lot of time.

Full Answer

B.It forces managers to justify every dollar of expenditure, eliminating obsolete programs.✓ Correct

Zero-Based Budgeting (ZBB) requires managers to build their budgets from zero, justifying every proposed expenditure based on its current value and necessity, rather than just adding a percentage to last year's budget. This is excellent for public sector/NGOs to weed out inefficiencies and obsolete programs, though it is very time-consuming.

Common mistakes

Assuming ZBB is a quick or easy process.

A public health department is switching from incremental budgeting to Zero-Based Budgeting (ZBB) for its community outreach programs.

Which of the following is a primary advantage of Zero-Based Budgeting in this context?

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Full Answer

Common mistakes

Practice the full ACCA MA — Management Accounting Practice Exam 1

More questions from this exam

A public health department is switching from incremental budgeting to Zero-Based Budgeting (ZBB) for its community outreach programs. Which of the following is a primary advantage of Zero-Based Budgeting in this context?

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA MA — Management Accounting Practice Exam 1

More questions from this exam

A public health department is switching from incremental budgeting to Zero-Based Budgeting (ZBB) for its community outreach programs.

Which of the following is a primary advantage of Zero-Based Budgeting in this context?