Assess the value of historical based budgeting to les and liz (10 marks)

Question 1

Historical based budgeting

Answer 1

using last years figures as a basis for a budget with minor adjustments for inflation and future estimations

Question 2

1 PRO - 1 reason why its valuable for bluebell

Answer 2

Blubell been operating since 2006
- therefore has many years of data it can use in order to prepare their budgets

Question 3

1 con - counterbalance

Answer 3

Historical based budgeting may not be accurate as it ignores external influences

Question 4

what are lez and liz better of using (ZBB)
why?

Answer 4

better of using Zero based budgeting
- Lez & liz can recognise that holiday market in keswick is competitve and can account for it in their budget -> more likely to be accurate

Question 5

Judgment - overall
which is more valuable

Answer 5

Overall Historical Based Budgeting = more valuable as Zero based budgeting takes too much time to carry out whereas HBB is simple, quick and easy.