US CMA Part 1 · Chapter 2 · Question 22 of 30
Which budgeting approach explicitly builds expected continuous improvements, such as planned cost reductions each period, into the budget figures?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Kaizen budgeting
Explanation
Kaizen budgeting incorporates expected continuous improvement into budget estimates, for example assuming that the cost per unit will fall by a set percentage each quarter. The other approaches do not specifically embed improvement targets.
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