Enlist various kind of budgets. Give one example of each.

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The Four Main Types of Budgets and Budgeting Methods

There are four common types of budgets that companies use: (1) incremental, (2) activity-based, (3) value proposition, and (4) zero-based.

1. Incremental budgeting

Incremental budgeting takes last year’s actual figures and adds or subtracts a percentage to obtain the current year’s budget.  It is the most common type of budget because it is simple and easy to understand.  Incremental budgeting is appropriate to use if the primary cost drivers do not change from year to year.  However, there are some problems with using the method:

It is likely to perpetuate inefficiencies. For example, if a manager knows that there is an opportunity to grow his budget by 10% every year, he will ________ ________ ______ ___ _________ _____________ ______.
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Degree : PG DIPLOMA PROGRAMMES
Course Name : Post Graduate Diploma in Hospital and Health Management
Course Code : PGDHHM
Subject Name : Introduction to Management
Subject Code : MHH 101
Year : 2022