What is the meaning of incremental budget method?

Incremental budget method, also known as budget adjustment method, refers to a budget preparation method that adjusts the original cost items on the basis of the cost level in the base period, combined with the future changes of the business level and related factors affecting the cost during the budget period. This is a traditional budgeting method.

Incremental budget defects:

1, incremental budget is often lack of pertinence;

2. When the management wants to use the budget to control costs or improve efficiency, the defects of incremental budget are more serious.

3. Incremental budget often lacks structure;

4. Incremental budgeting usually lacks flexibility;

5. It is not conducive to controlling costs or improving efficiency;

6. Incremental budgeting is often not systematic.