Under zero-based budgeting, when is an activity or cost included in the budget?
AIf it is a fixed cost
BIf it is below a set limit
CIf it was spent last year
DOnly if it is justified
Answer & Solution
Correct answer: D. Only if it is justified
Zero-based budgeting makes every activity earn its place, so unjustified costs are left out.
Keep practising Budgets and Budgetary Control
Browse all Budgets and Budgetary Control questions for CA Inter, or explore more Cost and Management Accounting topics.
Related questions
Standard quantity for output is 480 kg; 500 kg used; std price Rs 10. Usage variance?Std price Rs 12 per kg, actual Rs 13 for 500 kg bought. Materials price variance?Opening cash Rs 20,000, receipts Rs 65,000, payments Rs 70,000. Closing cash balance?Sales budget 5,000 units, opening stock 400, desired closing stock 600. Units to produce?Budgeted material cost was Rs 50,000 and actual cost Rs 54,000. What is the variance?A budget stated as Rs 40,000 fixed cost plus Rs 5 per unit variable cost gives what total The adjusted net income method begins with which starting item?The direct receipts and disbursements method suits which forecast horizon best?