What is one of the advantages of zero-based budgeting?

One of the main advantages of zero-based budgeting is that it helps to identify obsolete operations. This budgeting method requires that all expenses must be justified for each new period, starting from a "zero base." As a result, each department or project must evaluate and justify the need for every dollar they plan to spend, rather than simply carrying forward previous budgets.

This approach fosters a culture of accountability and rigor in financial planning, encouraging managers to critically assess whether current programs and expenditures are still necessary or effective. Hence, it enables the recognition of areas where resources can be reallocated or eliminated altogether, enhancing overall efficiency and effectiveness.

In contrast, the other options do not represent the advantages associated with zero-based budgeting. For instance, maintaining unquestioned efficient operations does not align with the fundamental principles of zero-based budgeting, which seeks continuous evaluation. Additionally, the approach prioritizes strategic allocation rather than just favoring short-term gains, and it encompasses both fixed and variable costs rather than accounting for fixed costs only.