What are the disadvantages of zero base budgeting, Managerial Accounting

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Disadvantages of zero base budgeting

1) It is not suitable for all the activities in an organization

2) It has limited application in a profit making organization. In this case it can be applied in case of worker s welfare measures

3) It is not advantageous to apply in R and D activities where it is difficult to define the objectives and goals

4) It is not a panacea for curing all management ills.

5) ZBB is indifferent as to whether total budget is increasing or decreasing

6) In case of large number of decision packages the ranking becomes unwieldy process. This can be  avoided by using computer

7) It increase more paper work

8) It takes more time and efforts

9) Managers often justify current level as minimum level of funding

10) Human problem there will be resistance to change on the part of managers

 


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