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Q25 Bpp 2020-21 kit Mock Exam 1 (September 2016 CBE)

This topic has 3 replies, 2 voices, and was last updated 9 months ago by LMR1006.

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February 15, 2024 at 8:00 pm #700447
alawi sayed
Participant
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Hi,
Which of the following is an alternative budgeting system that Corfe Co could use to allow for uncertainty?
1 Incremental budget
2 Zero based budget
3 Activity based budget
4 Rolling budget
I thought the answer should be no 1 incremental budgeting ,but according to the kit the answer is rolling budget.
Can you explain?
Thanks
February 15, 2024 at 9:47 pm #700454
LMR1006
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Rolling budgets and flexible budgets are a way of trying to reduce the element of uncertainty in the plan.
Rolling budgets allow you to reflect the actual results for the period and then roll it forward seeing was has changed.
February 21, 2024 at 12:44 pm #700793
alawi sayed
Participant
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Hi,
Maybe my understanding from the question is not proper,
I thought the question is asking which one will have more uncertainty if it is applied that’s why I have chosen incremental budgeting.
Does that clarify something?
Thanks,
February 21, 2024 at 1:34 pm #700796
LMR1006
Keymaster
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Could be used to allow for building in changes – uncertainty
Why would you want incremental that is just last year plus a bit
What uncertainty does that help to bring in
When you could reflect what you have learnt from the actual and reflect it going forward
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