True about &;Zero base budgeting&; is?
**Core Concept**
Zero-base budgeting is a budgeting technique where each program, activity, or expense is justified and approved as if it were the only one being funded. This approach requires a thorough analysis and justification of every expense, rather than starting from a previous year's budget and making adjustments.
**Why the Correct Answer is Right**
Zero-base budgeting involves a detailed examination of every expense, allowing for a more accurate and transparent allocation of resources. This method encourages a review of all programs and activities to ensure they are essential and aligned with the organization's goals. By doing so, zero-base budgeting helps eliminate wasteful spending and promotes efficient resource allocation.
**Why Each Wrong Option is Incorrect**
**Option A:** Zero-base budgeting is not primarily used for capital expenditures, but rather for operational expenses.
**Option B:** Zero-base budgeting does not involve simply increasing or decreasing last year's budget by a certain percentage.
**Option C:** Zero-base budgeting is not a form of cost-cutting, but rather a method of rationalizing expenses and allocating resources more effectively.
**Clinical Pearl / High-Yield Fact**
Zero-base budgeting can be applied to healthcare organizations to optimize resource allocation, reduce waste, and improve patient outcomes.
**Correct Answer: C. Zero-base budgeting is a method of rationalizing expenses and allocating resources more effectively.**