1. Which of the following statements regarding zero-base budgeting is false?

a. The budget begins from scratch.

b. It takes into account last period or any other previous period as base.

c. Under this method every activity needs to be justified.

d. It is time consuming and an expensive method.

2. Which of the following statements regarding key budget factor is true?

a. It does not limit the activities of the functional budgets.

b. It is identified prior to the preparation of all budgets.

c. The budget of key budget factor is prepared at the end.

d. Generally production volume is a key budget factor.