Some commentators argue that: ‘With continuing pressure to control costs and maintain efficiency, the time has come for all public sector organisations to embrace zero-based budgeting. There is no longer a place for incremental budgeting in any organisation, particularly public sector ones, where zero-based budgeting is far more suitable anyway.’Required:
(c) State the main stages involved in preparing zero-based budgets. (3 marks)
参考答案：Stages in zero-based budgetingZero-based budgeting involves three main stages:A. Activities are identified by managers. These activities are then described in what is called a ‘decision package’. This decision package is prepared at the base level, representing the minimum level of service or support needed to achieve the organisation’s objectives. Further incremental packages may then be prepared to reflect a higher level of service or support.B. Management will then rank all the packages in the order of decreasing benefits to the organisation. This will help management decide what to spend and where to spend it.C. The resources are then allocated based on order of priority up to the spending level.