A nurse manager is preparing a budget that does not base annual budgets on the revenue and expenditures of the prior year and has the advantage that outdated information is not integrated into the budget. The manager is using which budget method?

Question

a. Zero-based
b. Incremental
c. Labor
d. Operational

Answer 1

ANS: A
Correct: The zero-based method is based on the assumption of no volume and no resources assigned; it essentially starts each new budget period at zero rather than building from past budgets.
Incorrect:
b. The incremental method uses the current budget with an incremental increase in consideration of future growth.
c. Labor budgets represent a type of budget, rather than a method of budgeting.
d. Operational is a type of budget rather than a method of budgeting.