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Johnson & Smith is a huge corporation with many different departments covering hundreds of activities. They had switched to this new budgeting technique as it seemed as though it would help them allocate their limited funds better.
It was successful to some extent as each manager was required to look at every cost his department accrued. They would then be responsible for coming up with new ways of performing these activities.
It became obvious that certain managers were unable to handle these paperwork intensive demands and so the company will be reverting back to a system that focuses primarily on cost drivers next year.
What budgeting technique will they be using next year?
Suggested Answer: C
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39 comments · newest first
MA
Malcom
11 months ago
Incremental Budgeting is too old-school for a big corp like that!
MA
Marguerita
11 months ago
I agree, some managers just can't handle the paperwork!
CE
Cecilia
11 months ago
Wait, are they really reverting? Sounds like a step back.
HA
Hana
12 months ago
I think Zero Based Budgeting makes more sense for them!
GE
Geraldine
12 months ago
They're going back to cost drivers, so probably Activity Based Budgeting.
JA
Jamie
12 months ago
I feel like they might choose Incremental Budgeting because it’s easier for managers who struggled with the new system.
AR
Arminda
1 year ago
I practiced a question like this before, and I think Zero Based Budgeting could also fit, but it sounds like they want something simpler.
SU
Susana
1 year ago
I'm not entirely sure, but I remember something about Activity Based Budgeting focusing on cost drivers, which seems relevant here.
SH
Sharan
1 year ago
I think they might be going back to Incremental Budgeting since it’s less paperwork intensive.
TY
Ty
1 year ago
I'm not totally sure about the differences between these budgeting methods, so I'll need to think it through carefully. Maybe I can eliminate a couple options and then make an educated guess.
PA
Page
1 year ago
The question mentions the company is reverting to a system focused on cost drivers, so I think the answer is probably Activity Based Budgeting. I feel pretty confident about that.
DO
Dorcas
1 year ago
Okay, got it. The company is moving away from a budgeting technique that required a lot of paperwork and individual manager responsibility. Based on that, I'm guessing the answer is Zero Based Budgeting.
GI
Gilberto
1 year ago
Hmm, I'm a bit confused by all the details in this question. I'll need to re-read it a few times to make sure I understand the key points before trying to answer.
BE
Bethanie
1 year ago
This seems like a straightforward question about budgeting techniques. I'll carefully read through the details and think about what budgeting method would make sense based on the information provided.
JU
Julian
1 year ago
Incremental Budgeting? Sounds like they're going for the 'if it ain't broke, don't fix it' approach. Although, with all those managers struggling with the paperwork, maybe they should consider a budgeting system that's a little more 'plug and play'.
DY
Dyan
1 year ago
B) Zero Based Budgeting
CO
Colton
1 year ago
I agree, maybe a more straightforward approach would be better for them.
FR
Franklyn
1 year ago
A) Activity Based Budgeting
GE
Georgene
1 year ago
Yeah, it seems like they want to simplify things next year.
HY
Hyun
1 year ago
C) Incremental Budgeting
TE
Terrilyn
1 year ago
B) Zero Based Budgeting
AL
Alease
1 year ago
A) Activity Based Budgeting
VI
Virgie
2 years ago
I bet the managers at Johnson & Smith are secretly hoping for Incremental Budgeting. It's like the comfy, old slippers of budgeting techniques - familiar and easy to slip into, even if they're a little worn out.
BL
Blair
1 year ago
A) Activity Based Budgeting
TI
Timothy
1 year ago
I agree, Incremental Budgeting seems like a safe choice.
TE
Teri
1 year ago
C) Incremental Budgeting
LI
Lilli
1 year ago
B) Zero Based Budgeting
OD
Odelia
1 year ago
A) Activity Based Budgeting
SH
Shelba
2 years ago
I'm not sure, but I think Zero Based Budgeting could also be a good option for them to consider.
RO
Ronna
2 years ago
Zero Based Budgeting? Sounds like a recipe for disaster. Those managers can't even handle the paperwork for the current system, let alone starting from scratch every year. Incremental Budgeting is the way to go, no doubt about it.
LO
Lou
1 year ago
Incremental Budgeting is definitely a more practical approach for a company like Johnson & Smith.
LA
Laticia
1 year ago
I agree, Zero Based Budgeting seems like a lot of work for managers who are already struggling with paperwork.
CL
Clare
2 years ago
I agree with Adria, Incremental Budgeting makes more sense for a large corporation like Johnson & Smith.
DE
Derick
2 years ago
Activity Based Budgeting? No way, that's way too complex for a large corporation like Johnson & Smith. They're definitely going with good old Incremental Budgeting - simple and straightforward, just the way they like it.
JO
Joaquin
1 year ago
It makes sense for a large corporation like Johnson & Smith.
LU
Lucina
1 year ago
Incremental Budgeting is definitely easier to manage.
FR
Frederic
1 year ago
Yeah, Activity Based Budgeting was too complicated for some managers.
LA
Lavonne
2 years ago
I heard Johnson & Smith is going back to Incremental Budgeting next year.
AD
Adria
2 years ago
I think they will be using Incremental Budgeting next year.