ACCA PM · Chapter 10 · Question 1 of 9
Which of the following is the main criticism of incremental budgeting?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) It tends to carry forward past inefficiencies and slack into the new budget
Explanation
Incremental budgeting takes last year's figures and adjusts them for expected changes, so existing inefficiencies and wasteful spending are rarely questioned. Justifying everything from zero describes ZBB, and continuous updating describes rolling budgets. Incremental budgeting is actually quick and cheap to prepare.
More Budgetary systems and types of budget MCQs
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- Q6Which of the following is a recognised disadvantage of participative (bottom-up) budgeting?
- Q7The original budget for 10,000 units included: variable costs $60,000; semi-variable costs $35,000 (of which $15,000 is fixed); and fixed…