An Budgeting Method That Derives the Subsequent Year's Budget from the Current

question 52

Multiple Choice

An budgeting method that derives the subsequent year's budget from the current year's budget is called:

• A) Planning-programming-budgeting.
• B) Incremental budgeting.
• C) Zero-based budgeting.
• D) Performance budgeting.

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Definitions:

Fixed Factors

Inputs in production that cannot be altered in the short term, such as buildings and machinery.

Output

The amount of goods and services produced by a business, industry, or economy.

Marginal Cost

The cost added by producing one additional unit of a product or service, important for decision-making in resource allocation.

Average Total Cost

The total cost of production divided by the quantity of output produced; it includes all fixed and variable costs.