{"id":3674,"date":"2020-02-29T14:20:30","date_gmt":"2020-02-29T14:20:30","guid":{"rendered":"https:\/\/commerceiets.com\/?p=3674"},"modified":"2020-02-29T14:20:30","modified_gmt":"2020-02-29T14:20:30","slug":"zero-base-budgeting","status":"publish","type":"post","link":"https:\/\/commerceiets.com\/zero-base-budgeting\/","title":{"rendered":"ZERO BASE BUDGETING"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/commerceiets.com\/zero-base-budgeting\/#ZERO_BASE_BUDGETING\" title=\"ZERO BASE\nBUDGETING\">ZERO BASE\nBUDGETING<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/commerceiets.com\/zero-base-budgeting\/#EVOLUTION_OF_ZERO_BASE_BUDGETING\" title=\"EVOLUTION OF\nZERO BASE BUDGETING\">EVOLUTION OF\nZERO BASE BUDGETING<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/commerceiets.com\/zero-base-budgeting\/#FEATURES_OF_ZERO_BASE_BUDGETING\" title=\"FEATURES OF ZERO BASE BUDGETING\">FEATURES OF ZERO BASE BUDGETING<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/commerceiets.com\/zero-base-budgeting\/#NEED_FOR_ZERO_BASE_BUDGETING\" title=\"NEED FOR ZERO\nBASE BUDGETING\">NEED FOR ZERO\nBASE BUDGETING<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/commerceiets.com\/zero-base-budgeting\/#STAGES_OF_ZERO_BASE_BUDGETING\" title=\"STAGES OF ZERO BASE BUDGETING\">STAGES OF ZERO BASE BUDGETING<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/commerceiets.com\/zero-base-budgeting\/#ADVANTAGES_OF_ZERO_BASE_BUDGETING\" title=\"ADVANTAGES OF ZERO BASE BUDGETING\">ADVANTAGES OF ZERO BASE BUDGETING<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/commerceiets.com\/zero-base-budgeting\/#DISADVANTAGES_OF_ZERO_BASE_BUDGETING\" title=\"DISADVANTAGES OF ZERO BASE BUDGETING\">DISADVANTAGES OF ZERO BASE BUDGETING<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/commerceiets.com\/zero-base-budgeting\/#CONCLUSION\" title=\"CONCLUSION\">CONCLUSION<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"has-text-align-center wp-block-heading\"><span class=\"ez-toc-section\" id=\"ZERO_BASE_BUDGETING\"><\/span><strong>ZERO BASE\nBUDGETING<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Zero base budgeting is that form of budgeting wherein each cost element for the period is clearly justified, in terms of cost benefits. The&nbsp;management&nbsp;analyses and prioritizes the activities, depending on the determinants like alignment with the organizational objectives, fund availability, etc.<\/p>\n\n\n\n<p>Hence, all the activities are reassessed every time the <a href=\"https:\/\/commerceiets.com\/budget\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"budget (opens in a new tab)\">budget<\/a> is prepared. Its aim is to reduce the expenditure, by identifying the areas where cost can be cut.<\/p>\n\n\n\n<p><strong>ACCORDING TO ORIGINATOR PETER A\nPYHER <\/strong><\/p>\n\n\n\n<p>\u201cA planning and budgeting process\nwhich requires each manager to justify his entire budget request in detail from\nscratch (hence zero base) and shifts the burden of proof to each manager to\njustify why he should spend any money at all. The approach requires that all\nactivities be analyzed in \u2018decision packages\u2019 which are evaluated by systematic\nanalysis and ranked in order of importance.\u201d<\/p>\n\n\n\n<p><strong>ACCORDING TO CHARTERED INSTITUTE OF MANAGEMENT\nACCOUNTANTS, LONDON<\/strong><\/p>\n\n\n\n<p>\u201cZero Base Budgeting is a method\nof budgeting whereby all activities are revaluated each time a budget is set.\nDiscrete levels of each activity are valued and a combination chosen to match\nfunds available\u201d. <\/p>\n\n\n\n<p><strong>ACCORDING TO LEONARD MEREUNIT AND STEPHEN SOSMICK <\/strong><\/p>\n\n\n\n<p>\u201cZBB is a technique, which\ncomplements and links the existing planning, budgeting and review processes, it\nidentifies alternative efficient methods of utilizing limited resources in\neffective attainment of selected benefits. It is a flexible management\napproach, which provides credible rationale for reallocating resources by\nfocusing on the systematic review and justification of the funding and\nperformance levels of current programmes or activities.\u201d<\/p>\n\n\n\n<h2 class=\"has-text-align-center wp-block-heading\"><span class=\"ez-toc-section\" id=\"EVOLUTION_OF_ZERO_BASE_BUDGETING\"><\/span><strong>EVOLUTION OF\nZERO BASE BUDGETING<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In 1964, The United States Department of Agriculture introduced this system, but it was not found to be quite successful and, hence, abandoned. In the early seventies, however, it was Peter, A. Pyher, a staff control manager of Texas Instrument Corporation, United States of America, who introduced and developed this technique through his writings.<\/p>\n\n\n\n<p>Since then, a good number of private sector\norganisations have introduced ZBB in Budgetary Control, particularly in the\nU.S.A. And again, in 1972, the State of Georgia introduced the technique and the\nthen governor of the State of Georgia, Jimmy Carter, recognised widely the\nrelevance of ZBB and when he became the president of the U.S.A., he introduced\nthis system in the Federal Govt., in 1977. The public sector undertaking also\nshowed keen interest in ZBB and adopted the technique in budgeting.<\/p>\n\n\n\n<h2 class=\"has-text-align-center wp-block-heading\"><span class=\"ez-toc-section\" id=\"FEATURES_OF_ZERO_BASE_BUDGETING\"><\/span><strong>FEATURES OF ZERO BASE BUDGETING<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Manager of a\ndecision unit has to completely justify why there should be at all any budget\nallotment for his decision unit. This justification is to be made a fresh\nwithout making reference to previous level of spending in his department.<\/li><li>Activities\nare identified in decision packages.<\/li><li>Decision\npackages are ranked in order of priority.<\/li><li>Packages are\nevaluated by systematic analysis.<\/li><li>Under this\napproach there exist a frank relationship between superior and subordinates.\nManagement agrees to fund for a specified service and manager decision of the\ndecision unit clearly accepts to deliver the service.<\/li><li>Decision\npackages are linked with corporate objectives, which are clearly laid down.<\/li><li>Available\nresources are directed towards alternatives in order of priority to ensure\noptimum results.<\/li><\/ul>\n\n\n\n<h2 class=\"has-text-align-center wp-block-heading\"><span class=\"ez-toc-section\" id=\"NEED_FOR_ZERO_BASE_BUDGETING\"><\/span><strong>NEED FOR ZERO\nBASE BUDGETING<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There are a\nfew reasons for which this budgeting works well. They are \u2013<\/p>\n\n\n\n<p><strong>Systematic\nanalysis is mandatory<\/strong><\/p>\n\n\n\n<p>Before ensuring which department or unit will get the funding, this budgeting encourages careful analysis of why the funding is required. If the manager can\u2019t give enough reasons to approve funding, there will be no funding available for that particular unit which comes down to the next reason for&nbsp;choosing traditional budgeting over traditional budgeting.<\/p>\n\n\n\n<p><strong>Ensures cost-effectiveness<\/strong><\/p>\n\n\n\n<p>One of the\nmost important reasons for which zero-based budgeting is practiced is because\nit saves a lot of cost upfront. Let\u2019s say that you as a manager sees that one\nof the departments (let\u2019s say accounting) isn\u2019t doing well. The employees in\nthe accounting department are performing poorly and their work isn\u2019t adding\nvalue to the profit generation of the company. In this scenario, you can do two\nthings \u2013 first, you can put the employees of accounting into other job roles\nwhich will help them appreciate their own talent and abilities plus you can\noutsource the whole accounting department from next year. Since you\u2019re starting\nfrom zero, there will be almost no downside until you sit again next year to\nre-evaluate your decision.<\/p>\n\n\n\n<p><strong>It is based\non decisions over routine<\/strong><\/p>\n\n\n\n<p>In\ntraditional budgeting, most of the activities are routine. But in zero-based\nbudgeting, decision triumphs over routine, things are questioned, approaches\nare analyzed, and things are redone. As a result, there\u2019s no room for habituation\nor wastage of time, money, effort. And the management also feels more in\ncontrol because decision matters more than routine in this budgeting.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"STAGES_OF_ZERO_BASE_BUDGETING\"><\/span><strong>STAGES OF ZERO BASE BUDGETING<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>To understand the stages of ZBB, first of all, it is needed to know the meaning of decision packages.&nbsp;<strong>Decision packages<\/strong>&nbsp;refer to the development of an operational plan for the activities for which decisions are to be made. The stages are given as under:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"203\" height=\"450\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/02\/stages-of-zero-based-budgeting.jpg\" alt=\"ZERO BASE BUDGETING\" class=\"wp-image-3675\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/02\/stages-of-zero-based-budgeting.jpg 203w, https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/02\/stages-of-zero-based-budgeting-135x300.jpg 135w\" sizes=\"(max-width: 203px) 100vw, 203px\" \/><\/figure>\n\n\n\n<ol><li><strong>Identification\nand Description of Decision Packages<\/strong>:\nDecision package ascertains a particular activity, so as to analyse and rank\nthe activities against other activities, with respect to the use of scarce\nresources and make decisions thereon.<\/li><li><strong>Evaluation of\nDecision Packages<\/strong>: After\nidentification and description, decision packages are evaluated considering the\nfactors like alignment with the organizational objectives, regulatory\nrequirement and availability of money.<\/li><li><strong>Prioritisation\nof the Decision Packages<\/strong>: Decision\npackages are ranked on the basis of activities.<\/li><li><strong>Allocation of\nResources<\/strong>: Once the ranking is done, resources are\nallotted to the packages, which facilitates in the process of preparation of the\nbudget, as it is done for the very first time, without any consideration to\nprevious year\u2019s budgets.<\/li><\/ol>\n\n\n\n<p>The decision\npackages provide you with the details such as the cost involved, return,\nobjective, expected outcome, alternatives available and consequences of\nnon-performance of the activity.<\/p>\n\n\n\n<h2 class=\"has-text-align-center wp-block-heading\"><span class=\"ez-toc-section\" id=\"ADVANTAGES_OF_ZERO_BASE_BUDGETING\"><\/span>ADVANTAGES OF ZERO BASE BUDGETING<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>Profit center<\/strong><\/p>\n\n\n\n<p>This\nbudgeting prioritizes profits over expenses. That\u2019s why the departments or\nunits which generate direct or indirect profits are given preference. As a\nresult, businesses are able to get funding to generate more revenues and\nprofits.<\/p>\n\n\n\n<p><strong>Very detailed<\/strong><\/p>\n\n\n\n<p>Details can\nsave a business. This approach also reduces errors and helps a business look\ndeeply into its processes. As a result, inefficiencies are taken care of and\nbusiness becomes very effective.<\/p>\n\n\n\n<p><strong>It\u2019s\nstrategic<\/strong><\/p>\n\n\n\n<p>Since the aim\nof a business is to grow, get more clients, and serve more customers; it helps\nto become strategic. This type of budgeting allows the business to be strategic\nin their approach and only expend the amount they need to grow. As a result,\nspending would have a direction and would become a means for a business to\nachieve something worthwhile.<\/p>\n\n\n\n<p><strong>It\u2019s\nsituational<\/strong><\/p>\n\n\n\n<p>It doesn\u2019t\nencourage the practitioner to follow any rules\/regulations. It is done with an\nend in mind and for achieving a purpose, i.e. maximizing the wealth of a\nbusiness.<\/p>\n\n\n\n<p><strong>Efficiency<\/strong><\/p>\n\n\n\n<p>Zero-based Budgeting helps a business in the allocation\nof resources efficiently (department-wise) as it does not look at the previous\nbudget numbers, instead looks at the actual numbers<\/p>\n\n\n\n<p><strong>Accuracy<\/strong><\/p>\n\n\n\n<p>Against the traditional budgeting method that involves\nmere some arbitrary changes to the earlier budget, this budgeting approach\nmakes all departments relook every item of the cash flow and compute their\noperation costs. This methodology helps in cost reduction to a certain extent\nas it gives a true picture of costs against the desired performance.<\/p>\n\n\n\n<p><strong>Budget inflation<\/strong><\/p>\n\n\n\n<p>As mentioned above every expense is to be justified.\nZero-based budget compensates the weakness of incremental budgeting of budget\ninflation.<\/p>\n\n\n\n<p><strong>Coordination and Communication<\/strong><\/p>\n\n\n\n<p>Zero-based budgeting provides better coordination and\ncommunication within the department and motivation to employees by involving\nthem in decision-making.<\/p>\n\n\n\n<p><strong>Reduction in redundant activities<\/strong><\/p>\n\n\n\n<p>This approach leads to identify optimum opportunities and\nmore cost-efficient ways of doing things by eliminating all the redundant or\nunproductive activities<\/p>\n\n\n\n<h2 class=\"has-text-align-center wp-block-heading\"><span class=\"ez-toc-section\" id=\"DISADVANTAGES_OF_ZERO_BASE_BUDGETING\"><\/span><strong>DISADVANTAGES OF ZERO BASE BUDGETING<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The following\nare the various demerits of zero base budgeting:<\/p>\n\n\n\n<p><strong>No focus on\ncost centres<\/strong><\/p>\n\n\n\n<p>Since cost\ncentres don\u2019t help in generating immediate profits, this budgeting doesn\u2019t\nencourage funding them. And that is a downside because cost centers are\nresponsible for the long-term health and profits of a company. If they aren\u2019t\nnurtured well, the whole company will get affected at the end of the day.<\/p>\n\n\n\n<p><strong>Too complex<\/strong><\/p>\n\n\n\n<p>It needs\ndetailed attention and analysis. That\u2019s why it\u2019s become a complex job for\nmanagers. However, at the end of the day, this method pays off.<\/p>\n\n\n\n<p><strong>High\nManpower Turnover<\/strong><\/p>\n\n\n\n<p>The foundation of zero-based budgeting itself is a zero.\nBudget under this concept is planned and prepared from the scratch and require\nthe involvement of a large number of employees. Many departments may not have\nadequate human resource and time for the same.<\/p>\n\n\n\n<p><strong>Lack of Expertise<\/strong><\/p>\n\n\n\n<p>Providing an explanation for every line item and every\ncost is a problematic task and requires training for the managers.<\/p>\n\n\n\n<p><strong>Time consuming<\/strong><\/p>\n\n\n\n<p>Sometimes the necessary expenditures are hard to define\nfor managers as a result of which it becomes too time-consuming and exhaustive\na process to arrive at a solid foundation with respect to the decision-making\nabout the investment.<\/p>\n\n\n\n<p><strong>Requires manpower<\/strong><\/p>\n\n\n\n<p>This approach forces staff (especially managers) to\njustify every detail related to the expenditures. For instance, because the\nR&amp;D department cannot completely underpin their intended innovation, this\ncould have advantages for the budgeting of another department because they are\nable to justify their expenditures in great detail.<\/p>\n\n\n\n<p><strong>Requires knowledge<\/strong><\/p>\n\n\n\n<p>In order to apply this approach appropriately, it is\nnecessary to train managers well. For ZBB to be successfully implemented,\nmanagers at all levels of the organization must understand how&nbsp;zero based\nbudgeting works in the organization as they are ultimately responsible for the\nmanagement, decision-making and the communication of entire process.<\/p>\n\n\n\n<p><strong>Awareness for details<\/strong><\/p>\n\n\n\n<p>As the volume of the required data and forms is very large in zero based budgeting, no one is capable of knowing every detail of its content and decisions. There is a risk to compressing information and details because this might remove critically important data. This is a large risk.<\/p>\n\n\n\n<h2 class=\"has-text-align-center wp-block-heading\"><span class=\"ez-toc-section\" id=\"CONCLUSION\"><\/span><strong>CONCLUSION<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Zero base budgeting targets at presenting true expenses to be incurred by a department. Although this budgeting method is time-consuming, this is a more appropriate way of budgeting. This includes all-inclusive analysis of the budget proposal and if the managers make irrelevant variations so as to achieve what they want, they are probably exposed.<\/p>\n\n\n\n<p><strong>JOIN THE CHANNEL ON TELEGRAM<\/strong><\/p>\n\n\n\n<p><a href=\"https:\/\/t.me\/commerceiets\" target=\"_blank\">https:\/\/t.me\/commerceiets<\/a><\/p>\n\n\n\n<p><strong>CONNECT ON LINKEDIN<\/strong><\/p>\n\n\n\n<p><a href=\"https:\/\/www.linkedin.com\/in\/kajal-mahajan-7549b2197\/\" target=\"_blank\" rel=\"noopener\">https:\/\/www.linkedin.com\/in\/kajal-mahajan-7549b2197\/<\/a><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/cost-accounting\/\">Cost Accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/scope-of-cost-accounting-pdf\/\">Scope of cost accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/elements-of-cost\/\">Elements of cost<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/types-of-cost\/\">Types of cost<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/material-control-in-cost-accounting-pdf\/\">Material control<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/perpetual-inventory-system\/\">Perpetual inventory system<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/pricing-of-materials\/\">Pricing of materials<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/bin-card\/\">Bin Card<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/store-ledger\/\">Stores Ledger<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/incentive-plans\/\">Incentive plans<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/overhead\/\">Overheads<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/accounting-treatment-of-idle-time\/\">Idle time<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/system-of-wage-payment-in-cost-accounting\/\">System of wage payment in cost accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-time-rate-system-and-piece-rate-system\/\">Time rate vs piece rate wage system<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/cost-centre\/\">Cost Center<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/labor-turnover\/\">Labour Turnover<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/difference-between-management-accounting-and-cost-accounting\/\">Difference between management accounting and cost accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/allocation-and-apportionment-of-overheads\/\">Allocation and apportionment of overheads<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-allocation-and-apportionment-of-overheads\/\">Allocation vs Apportionment of overheads<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/absorption-of-overheads\/\">Absorption of overheads<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/over-absorption-and-under-absorption-of-overheads\/\">Over absorption and under absorption of overheads<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/activity-based-costing\/\">Activity based costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-traditional-costing-and-activity-based-costing\/\">Traditional costing vs ABC system<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/reconciliation-of-accounts\/\">Reconciliation of accounts<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/unit-costing\/\">Unit costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/cost-sheet-format\/\">Cost sheet format<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/cost-sheet-vs-production-account\/\">Cost sheet vs production sheet<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/job-costing\/\">Job costing<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/batch-costing\/\">Batch Costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-job-costing-and-batch-costing\/\">job costing vs batch costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/contract-costing\/\">Contract costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-job-costing-and-contract-costing\/\">Job Costing vs Contract costing<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/process-costing\/\">Process Costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/process-costing-vs-job-costing\/\">Process costing vs job costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/joint-products\/\">Joint products<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/by-products\/\">By Product&nbsp;<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/equivalent-production\/\">Equivalent production<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/marginal-costing\/\">Marginal costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/applications-of-marginal-costing\/\">Application of marginal costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/cost-volume-profit-analysis\/\">Cost volume profit analysis<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/tools-and-techniques-of-marginal-costing\/\">Tools and techniques of marginal costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/budget\/\">Budget<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/break-even-point\/\">Break even point<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/process-of-budgetary-control\/\">Process of budgetary control<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/explain-the-advantages-and-limitations-of-budgetary-control\/\">Advantages and limitations of budgetary control<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/budgetary-control\/\">Budgetary Control<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/zero-base-budgeting\/\">Zero base budgeting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/standard-costing\/\">Standard Costing<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/variance-analysis\/\">Variance Analysis<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-standard-costing-and-budgetary-control\/\">Standard costing vs budgetary control<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-management-accounting-and-cost-accounting\/\">Management accounting vs cost accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-financial-accounting-management-accounting-and-cost-accounting\/\">Cost accounting vs financial accounting<\/a><\/td><\/tr><\/tbody><\/table><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>ZERO BASE BUDGETING Zero base budgeting is that form of budgeting wherein each cost element for the period is clearly justified, in terms of cost benefits. The&nbsp;management&nbsp;analyses and prioritizes the activities, depending on the determinants like alignment with the organizational objectives, fund availability, etc. Hence, all the activities are reassessed every time the budget is&#8230;<\/p>\n<p class=\"more-link-wrap\"><a href=\"https:\/\/commerceiets.com\/zero-base-budgeting\/\" class=\"more-link\">Read More<span class=\"screen-reader-text\"> &ldquo;ZERO BASE BUDGETING&rdquo;<\/span> &raquo;<\/a><\/p>\n","protected":false},"author":2,"featured_media":3677,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[187],"tags":[],"_links":{"self":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/3674"}],"collection":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/comments?post=3674"}],"version-history":[{"count":0,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/3674\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media\/3677"}],"wp:attachment":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media?parent=3674"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/categories?post=3674"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/tags?post=3674"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}