Hello Class,

According to the website Difference Between, incremental budgeting is an incremental budget prepared using the previous periods budget or actual performance as a basis with incremental amounts added for the new budget. Zero-based budgeting is a system of budgeting in which all revenues and costs must be justified for each new accounting year. Incremental budgeting is less time-consuming and cost effective. Zero-based budgeting is very time-consuming and costly due to the need to adopt a detailed approach.Incremental budgeting is less responsive to market alterations. Zero-based budgeting is better equipped to incorporate changes in the market. I think if companies have a lot of time, and budgets need to change very often, they can use zero-based budgeting. Otherwise, if companies do not have much time, and their budgets are the same as in prior years, they can use incremental budgeting.

Thanks for reading,

Angel M

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