LO 7.1Which of the following is true in a bottom-up budgeting approach?

Every expense needs to be justified.

Supervisors tell departments their budget amount and the departments are free to work within those amounts.

Departments budget their needs however they see fit.

Departments determine their needs and relate them to the overall goals.

Question

Business

Heaven Haley

17 July, 22:37

LO 7.1Which of the following is true in a bottom-up budgeting approach?

Every expense needs to be justified.

Supervisors tell departments their budget amount and the departments are free to work within those amounts.

Departments budget their needs however they see fit.

Departments determine their needs and relate them to the overall goals.

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Answers (1)

Know the Answer?

Emery Weaver · Answer 1

The correct answer is letter "D": Departments determine their needs and relate them to the overall goals.

Explanation:

The bottom-up budgeting approach consists in giving each department within a firm the power of setting and controlling their budget according to the projects the department intends to develop that matches with the ultimate goal of the organization as a whole. It might be beneficial because each department is likely to come up with a budget that adjusts better to their needs but it could represent a headache for the company when it comes to racking each expense for each area.