Zero-base budgeting , Managerial Accounting

Zero-Base Budgeting

Zero-Base Budgeting (ZBB) was first developed and introduced for business by Peter A. Pyhrr. From this starting ZBB has been explored and adopted by many other businesses. The principle behind ZBB is that each cost centre budget should be made from ‘scratch’ (a zero base). It starts from the basic assumption that the budget for the next year is zero and every process/expenditure must then be justified fully in order to be included in next year’s budget. ZBB is useful for discretionary costs. In ZBB there should be a positive attempt to eliminate inefficiency and slacks from current operations.

The development and implementation of the ZBB model requires managers and others in the organization to engage in several main preparations, analytic and decision-making procedures. These major processes of ZBB include the following:

  • Stating the mission and aims of the organization
  • Recognition of the Organization's Decision Units and Decision Packages
  • Analysis of Each Decision Package
  • Ranking of Decision Packages
  • Acceptance and assigning of Resources
  • Budget Preparation
  • Monitoring and Evaluation

 

Posted Date: 12/7/2012 8:13:44 AM | Location : United States







Related Discussions:- Zero-base budgeting , Assignment Help, Ask Question on Zero-base budgeting , Get Answer, Expert's Help, Zero-base budgeting Discussions

Write discussion on Zero-base budgeting
Your posts are moderated
Related Questions
State (or select) the dependent variable (Y) Will the CER be employed to estimate price, labor hours, cost, material cost, or some other measure of cost? Will the CER be employ

Application of zero base budgeting In the following areas ZBB may be applied: 1) redundant schemes may be discontinued 2) identify the duplicate schemes and merge them in

Graphic method of break even analysis or break even chart The break even point can also be computed graphically. A break even chart is a graphical representation of marginal co

Adjacent extreme points differ in only one variable The first observation indicates that we can identify the extreme points of the solution space algebraically by setting zero as

Suggestion system  The suggestion system is as integral part of an established management system that aims at involving employees in kaizen. The number of worker s suggestion i

solutions for (POS) slow printing of sales tickets and unpredictable action of cash drawers. when credit approvals delayed the checkout process or when the computer was down, thus


where can I get the solution for the question on this link: http://www.expertsmind.com/questions/determine-the-cash-flow-budget-monthly-cash-disbursement-30145416.aspx I have att

Your company is considering investing in its own transport fleet. The presentposition is that carriage is contracted to an outside organization. The life of thetransport fleet woul

given the above data what would the breakeven in units and dollars be if u wanted a necessary after tax profit of $ 36,000 (assume a 30% tax rate ) units __________ ales dollars _