What budgeting approach requires managers to justify every expense from scratch rather than relying on previous figures?

The approach that requires managers to justify every expense from scratch is known as Zero-Based Budgeting. This method operates on the principle that every budget cycle starts from a "zero base," meaning that no prior funding levels are considered or assumed. Instead of merely adjusting previous budget figures, managers must thoroughly analyze and justify all proposed expenditures for the upcoming period. Each department or unit must articulate the necessity of funds based on current needs and objectives, making it a disciplined approach to budgeting.

This technique is particularly useful in promoting efficiency within an organization, as it helps to eliminate unnecessary costs and align expenditures with company goals. Managers are encouraged to evaluate the necessity and effectiveness of their spending continuously, leading to a more responsible allocation of resources.

The other approaches, such as Traditional Budgeting, Incremental Budgeting, and Flexible Budgeting, either rely on past budget figures or adjust allocations based on varying levels of activity, rather than starting afresh and justifying each expense independently.