The basic form of this method for determining expenditure levels for selling expense categories could be called zero-based budgeting:
A) objective and task method.
B) profitability projections.
C) cost-justification method.
D) profit margin budgeting.
E) percentage-of-sales method.

Question

Quizplus · Accepted Answer

Zero-based budgeting involves starting from scratch and justifying every expense as if it were a new expenditure. This is similar to the objective and task method which involves determining objectives and then identifying the tasks needed to achieve those objectives, and only then determining the associated costs. Both methods focus on justifying expenditures based on specific goals and objectives rather than simply applying a percentage to sales or using historical spending as a baseline.

The Basic Form of This Method for Determining Expenditure Levels