Which one of the following is true about a participative bottom-up approach in budgeting? A. Departmental managers always keep in mind of company's objectives. B. It is not time-consuming to prepare and consolidate budgets. C. The budget estimates are accurate as departmental maangers have a better understanding of what results can be achieved and at what costs. D. The central staff may not have all the knowledge needed to prepare the budget within every department of the company
Answer is B. It is not time-consuming to prepare and consolidate budgets.
Explanation:
Under bottom-up approach, the departmental managers are given the responsibility of preparing the departmental budget by themselves keeping in view the overall company's objective.
However, the major disadvantage is that departmental heads prepared the budget without keeping in view the plans of other departmental heads. Like production manager will prepare its own budget without taking care of sales budget prepared by sales manager and thus there is a problem synchronization and will consume lot of time and energy in the consolidation of budgets.
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