Module 16 - Budgeting Techniques Flashcards
1
Q
What is budget padding?
A
Deliberate underestimating/ overestimating of sales/ costs to make targets easier to obtain.
2
Q
What is stretch budgeting?
A
Creating very hard to reach targets - more popular in the us
3
Q
What is incremental budgeting and what’s it’s main disadvantage?
A
It’s taking last years budget and adjusting it slightly.
It has a tendency to perpetuate inefficiencies.
4
Q
What is the aim of Kaizen costing?
A
To make sure this years production is less than last years - incremental improvements.
5
Q
What is a rolling budget?
A
A rolling budget is a budget that is continuously updated at the end of each period.
