ACCA PM · Chapter 10 · Question 3 of 9
For which of the following types of cost is zero-based budgeting most likely to be useful?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Discretionary costs, such as staff training and advertising
Explanation
ZBB is most useful where spending is discretionary and there is no clear link between input and output, such as training, advertising or research. Material costs are driven by output, and depreciation and lease rent are committed costs that cannot easily be changed in the short term.
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