Consider the following statements about zero-base budgeting:I. The budget for virtually every activity in an organization is initially set tothe level that existed during the previous year.II. The budget forces management to rethink each phase of an organization'soperations before resources are allocated.III. To receive funding for the upcoming period, individual activities must bejustified in terms of continued usefulness to the organization.Which of the above statements is (are) true?A. II only.B. III only.C. I and II.D. II and III.E. I, II, and III.

It is true that under the traditional budgeting process, we see Statement I coming under practice;…

Answered: Consider the following statements about…

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter7: The Master Budget And Flexible Budgeting

Section: Chapter Questions

Problem 5Q: Explain zero-based budgeting and how it differs from the traditional approach to preparing next...

See similar textbooks

Similar questions

Which approach is most likely to result in employee buy-in to the budget? A. top-down approach B. bottom-up approach C. total participation approach D. basing the budget on the prior year
Why might a rolling budget require more management participation than an annual budget?
Which budget evaluates the results of operations at the actual level of activity? capĂtal budget cash budget flexible budget static budget
Which of the following statements is not correct? A. The sales budget is computed by multiplying estimated sales by the sales price. B. The production budget begins with the sales estimated for each period. C. The direct materials budget begins with the sales estimated for each period. D. The sales budget is typically the first budget prepared.
Which of the operating budgets is prepared first? A. production budget B. sales budget C. cash received budget D. cash payments budget
Which of the following is not considered a benefit of the budgeting process? a. Gives managers guidance when evaluating the performance of business operations. b. Determines the exact amount of revenues and expenses for the upcoming fiscal period. c. Helps managers achieve short-term and medium-term goals. d. Helps managers set long-term strategic plans.
Which is the mostly likely purpose of budgeting? a. Assess the non-financial performance of an organization b. Planning and control of an organization's income and expenditure C.Preparation of a five-year business plan d. Company valuation
You are constructing an annual operating budget that estimates costs related to the current year's operations. What category would you typically exclude from that operating budget? A- Operating expenditure B- Debt payments C- Capital expenditure D- Insurance premiums
The "Cash Budget" a)is used to predict future surpluses & shortages of cash, allowing the organization to plan ahead for such occurrences b)differs from the Master Budget due to the accrual concept c)uses the Master & Capital budgets for input d)all of the listed answers are correct
(Management Accounting) In practice, when developing a budget, two extremes used for guidance are ________ and ________. A) participative budget; zero-base budget B) strategic budget; long-range budget C) financial planning budget; strategic budget D) zero-base budget; activities of current or prior period
Zero-based budgeting refers to: a. Budgeting from the ground up as though the budget process were being initiated for the first time b. Using prior year’s budget as a bas year and adjusting it based on the experiences of the prior year and the expectations for the coming year c. Budgeting for cash inflows and outflows to time investments and borrowings in a way to maintain bank account with a minimum balance d. Developing budgeted costs from clear-cut measured relationships between inputs and outputs Clear my choice
The purpose of a flexible budget is:a) To cap discretionary expenditureb) To produce a revised forecast by changing the original budget when actual costs are knownc) To control resource efficientlyd) To communicate target activity levels within the organization by setting a budget in advance of the period to which it relates

SEE MORE QUESTIONS

Recommended textbooks for you

Principles of Cost Accounting

Accounting

ISBN:

9781305087408

Author:

Edward J. Vanderbeck, Maria R. Mitchell

Publisher:

Cengage Learning

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

Managerial Accounting

Accounting

ISBN:

9781337912020

Author:

Carl Warren, Ph.d. Cma William B. Tayler

Publisher:

South-Western College Pub

Principles of Cost Accounting

Accounting

ISBN:

9781305087408

Author:

Edward J. Vanderbeck, Maria R. Mitchell

Publisher:

Cengage Learning

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

Managerial Accounting

Accounting

ISBN:

9781337912020

Author:

Carl Warren, Ph.d. Cma William B. Tayler

Publisher:

South-Western College Pub

SEE MORE TEXTBOOKS