Zero-Based Budget – NBC Institute

PM – Nov 2024 – L2 – Q3 – Budgeting and Budgetary Control

Outline key stages in linking long-term objectives to budgetary control, and explain different budgeting types and forecasting methods.

Question

You are the management accountant of a large manufacturing company in Kaduna. A management retreat has been planned for next week to set the agenda for the preparation for next year’s budget.

Required:

a. Outline the key stages in the planning process that link long-term objectives and budgetary control. (8 Marks)

b. Explain the meaning of the terms ‘fixed budget’, ‘rolling budget’, and ‘zero-based budget’, and discuss the circumstances under which each budget might be used. (8 Marks)

c. Discuss whether time series analysis may be preferred to linear regression as a way of forecasting sales volume. (4 Marks)

Answer

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Tags: Budgeting, Fixed Budget, Forecasting, Planning Process, Rolling Budget, Time Series Analysis, Zero-Based Budget
Level: Level 2

Topic: Budgeting and Budgetary Control

MI – May 2016 – L1 – SA – Q8 – Budgeting

Identify the budgeting system where all costs are justified annually.

Question

The budgetary system that requires each budgeting unit to justify all costs in each year rather than year-to-year cost change is called:

A. Incremental budget
B. Rolling budget
C. Flexible budget
D. Zero-based budget
E. Program planning budgetary system

Answer

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Tags: Budgeting, Flexible Budget, Incremental Budget, Zero-Based Budget
Level: Level 1

Topic: Budgeting
Series: MAY 2016

IMAC – NOV 2023 – L2 – Q2 – Budgeting

Discuss the contents of a budget manual, explain incremental and zero-based budgeting, and prepare budgeted profit and loss statement and financial position for Chico Ltd.

Question

a) As organisations become larger and more complex, it is no longer possible for just one person to prepare a budget. Instead, budgeting across the organisation must be carefully coordinated among various actors. As a result, there is the need for a budget manual irrespective of the type of or approach to budgeting.

Required:
i) State FIVE (5) contents of a budget manual. (5 marks)
ii) Write short notes on the following:

Incremental budget. (2.5 marks)
Zero-Based Budget. (2.5 marks)

b) Chico Ltd, a newly established manufacturing company with branches across Africa is preparing its first annual budget. The following information is relevant:

Sales forecast for each month:

Month	Sales Forecast (GH₵)
January to June	20,000
July to December (and thereafter)	22,000

Gross profit margin: 20%
Credit given to customers: 2 months
Credit taken from suppliers: 2 months
Closing inventory: 3 months of demand
Monthly operating expenses: GH₵1,222

At the start of the budget period, a non-current asset with a cost of GH₵120,000 and a useful life of 6 years was purchased and transferred to one of its branches. In addition, a cash amount of GH₵80,000 was provided for the operations of Chico Ltd.

Required:
Prepare the budgeted statement of profit or loss and budgeted statement of financial position for Chico Ltd. (10 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Budget Manual, Budgeted Financial Position, Budgeted Profit or Loss, Incremental Budget, Zero-Based Budget
Level: Level 1

Topic: Budgeting
Series: NOV 2023

PM – Nov 2024 – L2 – Q3 – Budgeting and Budgetary Control

Outline key stages in linking long-term objectives to budgetary control, and explain different budgeting types and forecasting methods.

Question

You are the management accountant of a large manufacturing company in Kaduna. A management retreat has been planned for next week to set the agenda for the preparation for next year’s budget.

Required:

a. Outline the key stages in the planning process that link long-term objectives and budgetary control. (8 Marks)

b. Explain the meaning of the terms ‘fixed budget’, ‘rolling budget’, and ‘zero-based budget’, and discuss the circumstances under which each budget might be used. (8 Marks)

c. Discuss whether time series analysis may be preferred to linear regression as a way of forecasting sales volume. (4 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Budgeting, Fixed Budget, Forecasting, Planning Process, Rolling Budget, Time Series Analysis, Zero-Based Budget
Level: Level 2

Topic: Budgeting and Budgetary Control

MI – May 2016 – L1 – SA – Q8 – Budgeting

Identify the budgeting system where all costs are justified annually.

Question

The budgetary system that requires each budgeting unit to justify all costs in each year rather than year-to-year cost change is called:

A. Incremental budget
B. Rolling budget
C. Flexible budget
D. Zero-based budget
E. Program planning budgetary system

Answer

Find Related Questions by Tags, levels, etc.

Tags: Budgeting, Flexible Budget, Incremental Budget, Zero-Based Budget
Level: Level 1

Topic: Budgeting
Series: MAY 2016

IMAC – NOV 2023 – L2 – Q2 – Budgeting

Discuss the contents of a budget manual, explain incremental and zero-based budgeting, and prepare budgeted profit and loss statement and financial position for Chico Ltd.

Question

Required:
i) State FIVE (5) contents of a budget manual. (5 marks)
ii) Write short notes on the following:

Incremental budget. (2.5 marks)
Zero-Based Budget. (2.5 marks)

b) Chico Ltd, a newly established manufacturing company with branches across Africa is preparing its first annual budget. The following information is relevant:

Sales forecast for each month:

Month	Sales Forecast (GH₵)
January to June	20,000
July to December (and thereafter)	22,000

Gross profit margin: 20%
Credit given to customers: 2 months
Credit taken from suppliers: 2 months
Closing inventory: 3 months of demand
Monthly operating expenses: GH₵1,222

Required:
Prepare the budgeted statement of profit or loss and budgeted statement of financial position for Chico Ltd. (10 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Budget Manual, Budgeted Financial Position, Budgeted Profit or Loss, Incremental Budget, Zero-Based Budget
Level: Level 1

Topic: Budgeting
Series: NOV 2023

Question Tag: Zero-Based Budget

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PM – Nov 2024 – L2 – Q3 – Budgeting and Budgetary Control

Outline key stages in linking long-term objectives to budgetary control, and explain different budgeting types and forecasting methods.

MI – May 2016 – L1 – SA – Q8 – Budgeting

Identify the budgeting system where all costs are justified annually.

IMAC – NOV 2023 – L2 – Q2 – Budgeting

Discuss the contents of a budget manual, explain incremental and zero-based budgeting, and prepare budgeted profit and loss statement and financial position for Chico Ltd.

PM – Nov 2024 – L2 – Q3 – Budgeting and Budgetary Control

Outline key stages in linking long-term objectives to budgetary control, and explain different budgeting types and forecasting methods.

MI – May 2016 – L1 – SA – Q8 – Budgeting

Identify the budgeting system where all costs are justified annually.

IMAC – NOV 2023 – L2 – Q2 – Budgeting

Discuss the contents of a budget manual, explain incremental and zero-based budgeting, and prepare budgeted profit and loss statement and financial position for Chico Ltd.

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Question Tag: Zero-Based Budget

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PM – Nov 2024 – L2 – Q3 – Budgeting and Budgetary Control

Outline key stages in linking long-term objectives to budgetary control, and explain different budgeting types and forecasting methods.

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MI – May 2016 – L1 – SA – Q8 – Budgeting

Identify the budgeting system where all costs are justified annually.

You're reporting an error for "MI – May 2016 – L1 – SA – Q8 – Budgeting"

IMAC – NOV 2023 – L2 – Q2 – Budgeting

Discuss the contents of a budget manual, explain incremental and zero-based budgeting, and prepare budgeted profit and loss statement and financial position for Chico Ltd.

You're reporting an error for "IMAC – NOV 2023 – L2 – Q2 – Budgeting"

PM – Nov 2024 – L2 – Q3 – Budgeting and Budgetary Control

Outline key stages in linking long-term objectives to budgetary control, and explain different budgeting types and forecasting methods.

You're reporting an error for "PM – Nov 2024 – L2 – Q3 – Budgeting and Budgetary Control"

MI – May 2016 – L1 – SA – Q8 – Budgeting

Identify the budgeting system where all costs are justified annually.

You're reporting an error for "MI – May 2016 – L1 – SA – Q8 – Budgeting"

IMAC – NOV 2023 – L2 – Q2 – Budgeting

Discuss the contents of a budget manual, explain incremental and zero-based budgeting, and prepare budgeted profit and loss statement and financial position for Chico Ltd.

You're reporting an error for "IMAC – NOV 2023 – L2 – Q2 – Budgeting"

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