Answer (D) is correct . Zero-based budgeting is a planning process in which each manager must justify his/her department’s full budget for each period. The purpose is to encourage periodic reexamination of all costs in the hope that some can be reduced or eliminated.
Answer (A) is incorrect because A life-cycle budget involves estimates of a product’s revenues and expenses over its expected life cycle.
Answer (B) is incorrect because A main objective of zero-based budgeting is to avoid budgeting based on historical costs.
Answer (C) is incorrect because A program budget is formulated by objective rather than function.
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