Which Budgeting Process Uses Important Aspects of a Participative Management

question 47

Multiple Choice

Which budgeting process uses important aspects of a participative management style?

• A)incremental budgeting
• B)zero-based budgeting
• C)top-down budgeting
• D)bottom-up budgeting

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Definitions:

Shortage Costs

Costs incurred when demand exceeds supply, leading to inventory shortages, potentially including lost sales, backorder costs, and customer dissatisfaction.

Stock Out Costs

The costs associated with running out of stock, including lost sales, diminished customer loyalty, and operational disruption.

Accounts Payable Period

The Accounts Payable Period is the average amount of time it takes for a business to pay off its suppliers after receiving goods or services.

Operating Cycle

The average period of time required for a business to convert its investments in inventory back into cash through the process of producing goods, selling them, and collecting revenue from customers.