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ZBB and incremental budgeting

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › ZBB and incremental budgeting

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
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  • February 22, 2018 at 2:45 pm #438375
    humai
    Participant
    • Topics: 757
    • Replies: 248
    • ☆☆☆☆☆

    sir there is a past paper question that : explain the terms incremental budgeting and zero based budgeting.. For 4 marks

    Sir, if we exactly write the below both definitions so it correct for 4 marks?

    In incremental budgeting the approach is to take the previous year’s results and then to adjust them by an amount to cover inflation and any other known changes.

    In zero-based budgeting the previous period is not considered. Instead, each activity on its own merits is considered and cost and benefits of the different ways of performing it (and indeed whether or not the activity should continue) is drawn up. Then the most effective way of performing each activity is decided.Clearly any changes to the way an activity is performed may require funding, and there may not be sufficient funding available for all changes proposed, and therefore they are ranked to decide which changes are made

    February 22, 2018 at 4:48 pm #438424
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54814
    • ☆☆☆☆☆

    Yes – what you have written is perfect for the marks 🙂

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  • The topic ‘ZBB and incremental budgeting’ is closed to new replies.

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