Question

Consider the following steps:
1. Analysis of each decision unit in the context of total decision package
2. Identification of decision units
3. Allocation of resources to each unit based upon ranking
4. Evaluation and ranking of all decision units to develop the budget request
The correct sequence of these steps in zero based budgeting is ___________.

• A. 1, 2, 3, 4
• B. 2, 1, 4, 3
• C. 2, 4, 1, 3
• D. 2, 3, 4, 1

Answer 1

The correct option is B 2, 1, 4, 3

Zero-based budgeting can be defined as a method of budgeting in which all expenses must be justified and approved for each new period. The correct sequence of these steps in zero based budgeting is:

a) Identification of decision units

b) Analysis of each decision unit in the context of total decision package

c) Evaluation and ranking of all decision units to develop the budget requestd) Allocation of resources to each unit based upon ranking.