What is the main focus of incremental budgeting?

The main focus of incremental budgeting is to review only the changes in the budget from the previous period to the current one. This approach allows organizations to make slight adjustments based on anticipated increases or decreases in expenses or revenue, rather than starting the entire budget process over each fiscal year. By concentrating exclusively on incremental changes, it simplifies budgeting and reduces the time and effort involved in preparing a comprehensive financial plan.

This method is often viewed as a pragmatic approach, as it builds on historical data and does not require a complete reassessment of all budget items. The emphasis is on small adjustments while maintaining the existing budget structure, which can help organizations allocate resources more efficiently based on prior spending while still accounting for anticipated growth or contraction in specific areas.

The other options present different budgeting concepts that do not align with the principles of incremental budgeting. For instance, assuming all expenses are fixed from the previous year is more characteristic of a static budgeting approach, while adjusting budgets based solely on departmental requests may lead to bias and is not systematic in its review process. Implementing a zero-start budgeting approach each year fundamentally differs as it requires justifying all expenses from scratch, rather than using prior budget figures as a baseline.