Asked by Anaisa Mayfield on May 27, 2024
Verified
Top-down budgeting refers to
A) a budgeting system that begins with sales forecasts and works downwards to the raw materials budget.
B) a budgeting systems that begins with budgeting the facility-level costs.
C) a budgeting system where senior managers impose budget targets on junior managers.
D) a budgeting system where there are frequent communications between top and bottom managers.
Top-Down Budgeting
A budgeting approach where the budget is created by the top management and then distributed down through the ranks of the organization.
Sales Forecasts
Predictions of the future sales performance of a company, typically based on historical data, market trends, and economic conditions.
- Recognize challenges and techniques in budgeting, including top-down and participative approaches.
Verified Answer
NB
Norma BejaranoJun 01, 2024
Final Answer :
C
Explanation :
Top-down budgeting is a budgeting system where senior managers impose budget targets on junior managers. This approach assumes that senior management has a better understanding of the big picture and the strategic goals of the organization, and can set appropriate targets for each department or division. It can help to ensure that budgets are aligned with strategic objectives but can lead to less participation from lower-level managers who may feel less ownership over the budget.
Learning Objectives
- Recognize challenges and techniques in budgeting, including top-down and participative approaches.
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