In zero-base budgeting, what must be done for each line item?

• A. The line item is eliminated if not used last year.
• B. The budget is based on department head opinion.
• C. The amount equals last year's amount plus inflation.
• D. The budget amount must be justified.

Answer: (D)

In zero-base budgeting, every line item starts from zero and must be justified from the ground up. This means for each item you explain why it is needed, what it will achieve, and how the cost is determined, often weighing alternatives and the expected benefits. Because nothing is carried forward by default, the funding decision hinges on the justification rather than past spending or inflation. That’s why the best answer is that the budget amount must be justified for each line item. If an item isn’t truly needed, it should be dropped; if it is needed, it must be supported with a clear, documented justification. This approach contrasts with basing the budget on last year’s amount, inflation, or a department head’s opinion alone.