Kevin is preparing the budgeted income statement for Nutshell Corp. for the upcoming month February and used the following information: Expected sales, $60,000; Expected cost of Goods Sold (COGS),50% of sales; and administrative expenses, $12,000. If Kevin has ignored all information from the previous month, which type of budget is Kevin using?
A) Imposed Budget
B) Participative budget
C) Rolling Budget
D) Zero-based Budget

Question

Quizplus · Accepted Answer

Zero-based budgeting is prepared from the base value of zero each period which means all new estimates adopted in zero-based budgeting ignore previous information.

Kevin Is Preparing the Budgeted Income Statement for Nutshell Corp