21.7.1. Key Features of ZBB

Try these first

1. 1.

   What does Zero-Based Budgeting (ZBB) require from each budget cycle?

   Hint

   Think about how ZBB contrasts with traditional methods.

2. 2.

   Why is ZBB beneficial for cost efficiency?

   Hint

   Consider what ZBB emphasizes regarding justifying costs.

3. 3.

   What is a key feature of Zero-Based Budgeting?

   • Relying on last year's budget
   • Justifying every expense
   • Adopting fixed costs

   Hint

   Think about what makes ZBB unique.

4. 4.

   True or False: ZBB is a flexible budgeting method that allows adjustments based on past expenditures.

   • True
   • False

   Hint

   Consider the fundamental nature of ZBB.

5. 5.

   You are a financial manager in a tech startup applying ZBB. Propose a strategy to implement ZBB successfully while overcoming potential resistance from departments.

   Hint

   Think about communication and involvement strategies.

6. 6.

   Evaluate the effectiveness of ZBB in a project that failed to control costs despite following this budgeting method. What could have been the issues?

   Hint

   Consider both internal and external influences on budgeting.