Which of the Following Is an Advantage of Zero-Based Budgeting

question 165

Multiple Choice

Which of the following is an advantage of zero-based budgeting?

• A)Zero-based budgeting is time consuming.
• B)Zero-based budgeting forces managers to justify each dollar in the budget to ensure that some expenses are lower in a current year compared to what they were in previous years.
• C)Zero-based budgeting is labor intensive.
• D)All of the above are advantages.

Interpret financial outcomes related to manufacturing activities, including net operating income and the cost of goods available for sale.

Understand how to calculate the amount of direct material purchased during the year.

Identify and calculate the ending balance in the Raw Materials inventory account.

Calculate the cost of goods manufactured for the year.

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Definitions:

Unionization

The process by which workers form or join a union in order to collectively negotiate with their employers over wages, benefits, working conditions, and other employment terms.

Minimum Inventory

The lowest quantity of stock that must be kept on hand to prevent stockouts, taking into account lead times and demand variability.

Perfect System

An idealized or hypothetical system that operates without any faults, failures, or inefficiencies.

Raw Materials

The unprocessed natural resources or substances that are used in the manufacturing of goods, providing the basic material from which products are made.