A detailed manual outlining the administrative procedures and operations for the effective management of a budgetary control system, including the roles and responsibilities of the budget committee and budget centers, timetable for budget preparation, and procedures for budget revision.
Budget slack refers to the excess funds that managers intentionally create by overestimating costs or underestimating revenues in budget preparation, often aiming to meet performance evaluations or safeguard against uncertainties.
An incremental budget is prepared using a previous period's budget or actual performance as a basis, with incremental amounts added for the new budget period. It often fails to account for changed operating conditions.
A zero-base budget (ZBB) is a cash-flow budget where the manager responsible must prepare and justify all expenditures from a zero base, assuming no prior spending commitments. This method compels a thorough review of each cost element, contrasting sharply with the incremental budget, which adjusts previous budgets.
