The budget procedure that requires managers to estimate sales, production, and other operating data as though operations were being started for the first time is called continuous budgeting.

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The budget procedure described is known as zero-based budgeting, not continuous budgeting. Zero-based budgeting requires managers to justify all expenses for each new period, starting from a "zero base," as if the operations were being initiated for the first time. Continuous budgeting, on the other hand, involves continuously updating the budget by adding a new period (month, quarter, etc.) as the current period concludes, keeping the budget length constant.

The Budget Procedure That Requires Managers to Estimate Sales, Production