Which budgeting method requires departments to prepare decision packages and rank them?

• A. Zero-Based Budgeting
• B. Line-Item Budget
• C. Program Budgeting
• D. Performance Budgeting

Answer: (A)

Zero-based budgeting requires departments to justify every proposed activity from scratch and to present decision packages—clear descriptions of a program or activity, its cost, and the expected benefits. These packages are then ranked against one another to determine funding order, so resources are allocated to the highest-priority items given the available money. This approach starts from zero each cycle and forces a fresh evaluation of all options, rather than simply adjusting last year’s budget. That emphasis on building justification and ordering all options by value is what makes this method the best fit for requiring both decision packages and ranking.