5. Incremental Cost Analysis and Zero-Based Budgeting Incremental cost analysis is a potentially useful tool for zero-based budgeting

(ZBB). ZBB requires the development of program costs in an agency’s budget request. The programs need to be evaluated and ranked according to their relative importance to the agency’s mission. Decision makers then make funding decisions based on the relative importance of a program and its cost.

Conduct an Internet search on the topic of ZBB to identify an agency, if any, that claims to use ZBB. Study its ZBB budget to find out whether IC is used, and if not, discuss how to use it to enhance the budget.