21.7. Zero-Based Budgeting (ZBB)

Try these first

1. 1.

   What does ZBB stand for?

   Hint

   Think of starting from scratch.

2. 2.

   In ZBB, do expenses from previous budgets count?

   Hint

   Remember ZBB requires a fresh evaluation.

3. 3.

   What does ZBB require from each department every budgeting cycle?

   • A. Justify all expenses
   • B. Use previous budgets
   • C. Follow set formulas

   Hint

   Consider the meaning of starting from zero.

4. 4.

   Zero-Based Budgeting helps enhance what aspect of financial management.

   • True
   • False

   Hint

   Think about the benefits.

5. 5.

   A medium-sized tech company is considering switching from traditional budgeting to Zero-Based Budgeting. Identify potential challenges and benefits this company might face.

   Hint

   Consider both the positive and negative sides of change.

6. 6.

   Imagine you are a financial consultant for a tech startup implementing ZBB. Draft a plan outlining the steps to educate staff on this transition.

   Hint

   Think of steps to inform and assist the team during the change.