CIPS L4M2 Exam - Topic 10 Question 24 Discussion

Actual exam question for CIPS's L4M2 exam

Question #: 24
Topic #: 10

A consulting firm in London had previously had static budgets. They were set once and locked in for the year. This resulted in departments meeting their budgets early and doing virtually nothing the rest of the accounting period. To address this imbalance, the company tossed out the static budget and developed a new one for each department of the next 18 months. And each month, real sales figures are analyzed against the plan and the budget is adjusted accordingly. Then the company adds another month into the budgeting plan. What type of budget this company is using?

AActivity-based budget

BRolling budget

CIncremental budget

DZero-based budget

Show Suggested Answer

Suggested Answer: B

Those items make up small portion of spend and the supply risk is low. So it is tactical item according to Kraljic portfolio matrix. Procurement should bundle these items into larger contracts, simplify procurement process.

LO 2, AC 2.1

by Belen at Nov 26, 2023, 02:45 PM

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Amber

6 months ago

Interesting approach, but will it really improve performance?

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Malcom

6 months ago

I disagree, it seems more like an activity-based budget.

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Elsa

7 months ago

Really? I thought rolling budgets were more complex.

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Sheridan

7 months ago

Definitely a rolling budget, great move!

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Leonora

7 months ago

Sounds like a rolling budget to me!

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Naomi

7 months ago

I thought it might be an activity-based budget at first, but the monthly adjustments really make me lean towards rolling budget now.

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Irene

7 months ago

I practiced a similar question, and I believe the key is that they adjust the budget regularly, which points to a rolling budget.

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Izetta

7 months ago

I'm not entirely sure, but I remember something about rolling budgets being flexible. This seems to fit that description.

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Alison

8 months ago

I think this sounds like a rolling budget since they keep adjusting it each month and adding new months.

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Avery

8 months ago

The question mentions the company "tossed out the static budget," so that rules out an incremental budget. And it's not zero-based since they're just updating the existing budget. I'll go with rolling budget.

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Armanda

8 months ago

I'm a bit confused by the details here. Is this an activity-based budget or a rolling budget? I'll need to think through the key differences to decide.

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Ryann

8 months ago

This sounds like a rolling budget to me. The company is updating the budget monthly and adding another month, which fits the description.

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Tennie

8 months ago

Okay, I think I've got it. The company is adjusting the budget each month based on actual sales, which means it's a rolling budget, not a static one. That makes sense.

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Jarod

8 months ago

This question seems straightforward, but I want to make sure I understand the key considerations for packaging. Designing modular, loosely coupled units of metadata sounds like a good strategy to keep things organized.

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Luis

8 months ago

activiti_admin: Based on the question, the admin username is probably related to the "activiti-app" application. I'll try "activiti_admin" as my answer.

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Veronica

8 months ago

Okay, I think I've got this. The key is to configure the AAA server group to authenticate the client properly.

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Octavio

1 year ago

I was going to say zero-based budget, but then I read the part about adjusting the budget monthly. That's a clear sign of a rolling budget. Nice catch!

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