In Zero-Based Budgeting

question 97

Multiple Choice

In zero-based budgeting:

• A)the prior year's budgeted amounts or actual results are used to build the new operating budget.
• B)the budget is prepared by the top managers.
• C)managers must justify each item within the operating budget as if it were a new budget item.
• D)the budget is updated every month.

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Definitions:

Fixed Expenses

Costs that do not change with the level of production or sales volume, such as rent, salaries, and insurance.

Financial Advantage

The benefit gained by a business or investor that puts them in a better financial position compared to competitors or the market average.

French and Indian Wars

A series of military engagements between Britain and France in North America between 1688 and 1763, part of the larger struggle for colonial dominance.

Bus Maintenance

The process of keeping buses in optimal working condition through regular inspections, repairs, and necessary replacements.