1
Q
What is meant by incremental budgeting?
A
Incremental budgeting is budget that is based on the previous year’s budget and are normally adjusted for inflation.
2
Q
Advantages of incremental budgeting
A
*It is simple and cheap.
*It is relatively quick to administer.
3
Q
Limitations of incremental budgeting
A
- It does not identify inefficient operations
*Budgetary slack once introduced will be carried forward.
*It is not suitable for changing environments, as it is based on the past and assumes that activities will continue the same.
