Ms. Alvarez, head of the Research and Development Department of Armco Company, is preparing the budget for her department for the next year. As part of her preparation, she started to look over the various projects in process and was surprised to see the number of projects that were still being funded although they were not moving forward. Since it was very difficult for her to go to a person and say their pet project would no longer be funded because it was going nowhere, she was looking for a more objective way to handle the issue. She had heard about zero-based budgeting and was considering adopting it, with her boss' approval.
Required: What kind of information should Ms. Alvarez bring to her boss to help win approval for her to change how she develops her budget? Also bring in the idea of base budgeting.

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The Answer of Ms. Alvarez, head of the Research and Development Department of Armco Company, is preparing the budget for her department for the next year. As part of her preparation, she started to look over the various projects in process and was surprised to see the number of projects that were still being funded although they were not moving forward. Since it was very difficult for her to go to a person and say their pet project would no longer be funded because it was going nowhere, she was looking for a more objective way to handle the issue. She had heard about zero-based budgeting and was considering adopting it, with her boss' approval.
Required: What kind of information should Ms. Alvarez bring to her boss to help win approval for her to change how she develops her budget? Also bring in the idea of base budgeting.

Ms Alvarez, Head of the Research and Development Department of Armco