Compare and contrast two types of budgeting concepts
Not what you're looking for?
I need help to compare and contrast two types of budgeting concepts such as activity-based costing, zero based, line item, management by objectives, and performance based.
Thanks!
Purchase this Solution
Solution Preview
Hi there,
Here are your answers:
Activity Based Costing:
Activity Based Costing (ABC) is an accounting technique that allows an organization to determine the actual cost associated with each product and service produced by the organization without regard to the organizational structure.
Zero Based Budgeting is a technique that sets all budgets to nil at the beginning of the year or period and requires from the departments that they justify all of their expenditures, not just those exceeding the budget. Money is allocated to the departments based on merit and not based on the previous year budget plus or minus some percentage such as in many traditional budgeting systems.
Its aim is to achieve is an optimal allocation of resources that incremental and other budgeting systems cannot achieve. Managers are asked to identify and justify their areas of work in terms of decision packages prior to starting the work.
Advantages of Zero Based Budgeting
*
The budget process focuses on a comprehensive analysis of objectives and needs.
*
Planning and budgeting are combined into a single process.
*
Managers must evaluate the cost effectiveness of their operations in detail.
*
Management participation in planning and budgeting is expanded at all levels of the organization.
Criticisms and drawbacks of Zero Based Budgeting
* The huge amount of work involved.
* May lead to ...
Purchase this Solution
Free BrainMass Quizzes
Operations Management
This quiz tests a student's knowledge about Operations Management
Business Processes
This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.
Business Ethics Awareness Strategy
This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.
Employee Orientation
Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.