You are the management account of group of companies and your managing director has asked you to explore the possibilities of introducing a zero based system experimentally in one of the operating companies in place of its existing orthodox system.
- Explain how zero-base budgeting would work within the company chosen
- What advantages it might offer over the existing system?
- What problems might be faced in introducing a zero-base budgeting scheme?
- The future you would look for in selecting the operating company for the introduction in order to obtain the most beneficial result from the experiment.