Question

The process of developing budget estimates by requiring managers to estimate sales, production, and other operating data as though operations were being initiated for the first time is referred to as _____ budgeting.

Answer 1

Answer:

Zero based budgeting

Explanation:

Zero-based budgeting is a process of developing budget estimates by requiring managers to estimate sales, production, and other operating data as though operations were being initiated for the first time.

It is time consuming compared to other method of budgeting ( traditional).

Zero-based budgeting (ZBB) is a method of budgeting where income less expenditure is equal to zero.

It is a budgeting in which all expenses must be justified for each new period. It is detail-oriented.

Zero-based budgeting can be used to lower costs by avoiding blanket increases or decreases to a prior period's budget.

zero-based budgeting may be a rolling process done over several years.

Answer 2

Answer:

zero based budgeting (ZBB)

Explanation:

Zero based budgeting (ZBB) refers to preparing a budget without using any type of data from previous years, e.g. sales predictions, fixed and variable costs, etc.

Companies use ZBB because they like to assume that no activities are untouchable, therefore, all expenses must be justified in order to remain in next year's budget. It is a great technique for looking where to cut costs. Of course that the people that prepare ZBB budgets have an idea of how things are going to be, but they must be able to justify activities.

ZBB are specially useful when costs are out of control and the company must stop them from growing.