In 2020, JMT Limited used a zero-based budget (ZBB). The finance director believes that its budgeting...
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In 2020, JMT Limited used a zero-based budget (ZBB). The finance director believes that its budgeting process is now a "well-oiled machine" and does not need to do a ZBB again in 2021. Rather, to save time and other resources related to ZBB, the finance director highlighted to the board that she will consider taking the 2020 results as the basis for the 2021 budget. For 2021 budgets, she will adjust the 2020 results and allow for inflation at the producer price inflation (PPI) (or any such inflation adjustment the board allows) and planned growth. Required: a. What budgeting approach is the finance director proposing? b. Advise the board on the conditions that may improve the success of the finance director's proposed budgeting approach. In 2020, JMT Limited used a zero-based budget (ZBB). The finance director believes that its budgeting process is now a "well-oiled machine" and does not need to do a ZBB again in 2021. Rather, to save time and other resources related to ZBB, the finance director highlighted to the board that she will consider taking the 2020 results as the basis for the 2021 budget. For 2021 budgets, she will adjust the 2020 results and allow for inflation at the producer price inflation (PPI) (or any such inflation adjustment the board allows) and planned growth. Required: a. What budgeting approach is the finance director proposing? b. Advise the board on the conditions that may improve the success of the finance director's proposed budgeting approach.
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aThe Finance Director proposing ZBB Zero Base Budgeting As mentioned in this budget the ... View the full answer
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