Which budgeting method uses detailed justification of all expenses each period?

The correct answer is zero-based budgeting, which requires a thorough justification of all expenses for each budgeting period, rather than simply adjusting previous budgets. This method starts from a "zero base," meaning that every department must justify its budget requests from scratch each time, regardless of past spending.

This approach ensures that all expenditures are aligned with current organizational goals and needs, making it particularly useful for prioritizing resource allocation effectively. By requiring justification for all planned expenses, zero-based budgeting encourages a critical review of budgeting decisions and a focus on results and efficiency. This method can lead to more intentional spending, as it often reveals redundant or unnecessary expenditures that might have remained unchallenged under other budgeting methods.

In contrast, incremental budgeting usually just involves adjusting previous budgets and does not require reevaluating the necessity of each expense. Flexible budgeting adjusts to changes in activity levels but does not address the justification of expenses from a zero base. Program budgeting, while focusing on outcomes and objectives, still often builds upon existing budgets rather than starting anew with each cycle.