Question

in the context of budget preparation, which of the following is an advantage of using bottom-up budgeting? it is less time consuming than the top-down approach. it eliminates the possibility of budgetary slack. middle managers are likely to be highly motivated to achieve budgetary goals. supervisory managers are likely to know the long-term strategic needs of a company.

Answer 1

Bottom-up budgeting's advantage lies in its ability to motivate middle managers, as they play a central role in creating their own departmental budgets, leading to enhanced ownership and commitment to financial goals.

Step-by-step explanation:

In the context of budget preparation, one advantage of using bottom-up budgeting is that middle managers are likely to be highly motivated to achieve budgetary goals. This approach generally involves individual departments or sections of a business creating their own budgets, which are then consolidated into the overall company budget.

The processes allows for a more detailed and informed budget because those who are directly involved with the day-to-day operations have a better understanding of their own needs and costs. Additionally, it gives middle managers a sense of ownership over their financial targets, which can enhance motivation and commitment to achieving the set goals.

Key attributes of bottom-up budgeting include flexibility for local challenges and needs, as opposed to top-down budgeting, which is often more rigid and controlled, relying on higher levels of management to set budgetary goals without as much input from those who are implementing the policies or controlling day-to-day expenses.