This is a subjective question so take a few seconds to think and gather your thoughts. Showcase your knowledge of what information is needed to create a budget and why you need the information. Answer why the information is relevant. When someone is in an interview, the mind can go blank (d. Think logically on how to answer this question and what are the basic information needed to do a budget. When in doubt use the KIS method (Keep IT Simple) and do not overthink the question. The whole idea of an interview and this type of question will allow the interviewer the ability to to see how the interviewee, reacts to the question and if they can think on their feet. Slow down and think about the answer.
"In order to determine the budget , we have to create the, scope baseline, schedule baseline, WBS, activity list, resources calendar, cost baseline including contingency reserve, then management reserves. Understand all the above details is a very important. It's important to the project because after determining the ROM budget, the sponser and stakeholders will decide if they need to this project or not , or shall go for other projects suitable for them."
"In my opinion, a good budget is one that has buy in from all departments in the company, is realistic yet strives for achievement, has been risk adjusted to allow for a margin of error, and is tied to the company's overall strategic plan. In order to achieve this, the budget needs to be an iterative process that includes all departments. It can be zero based (starting from scratch each time), or building off the previous year, but it depends on what type of business you're running as to which is better. It's important to have a good budgeting/planning calendar that everyone can follow."