Question

The process of developing budget estimates by requiring all levels of management to estimate sales, production, and other operating data as though operations were being initiated for the first time is referred to as:

Answer 1

Zero-based budgeting

Step-by-step explanation:

Zero-based budgeting is a method of expenses to be incurred must be justified and approved within each new period.

It is called zero based budgeting because at the beginning of every period budgeting starts at a zero base. Needs and cost attached to every function are are analysed afresh and funds allocated accordingly.

This process does not consider previous fund allocation to the function, rather it assumes sales, production, and other operating data as though operations were being initiated for the first time.