CIPS Exam L4M2 Topic 10 Question 24 Discussion

Actual exam question for CIPS's L4M2 exam

Question #: 24
Topic #: 10

[All L4M2 Questions]

A consulting firm in London had previously had static budgets. They were set once and locked in for the year. This resulted in departments meeting their budgets early and doing virtually nothing the rest of the accounting period. To address this imbalance, the company tossed out the static budget and developed a new one for each department of the next 18 months. And each month, real sales figures are analyzed against the plan and the budget is adjusted accordingly. Then the company adds another month into the budgeting plan. What type of budget this company is using?

AActivity-based budget

BRolling budget

CIncremental budget

DZero-based budget

Show Suggested Answer

Suggested Answer: B

Those items make up small portion of spend and the supply risk is low. So it is tactical item according to Kraljic portfolio matrix. Procurement should bundle these items into larger contracts, simplify procurement process.

LO 2, AC 2.1

by Belen at Nov 26, 2023, 02:45 PM

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Octavio

1 months ago

I was going to say zero-based budget, but then I read the part about adjusting the budget monthly. That's a clear sign of a rolling budget. Nice catch!

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