Good management includes good budgeting. (1) Explain why the bottom-up approach to budgeting is...

Question

Good management includes good budgeting.
(1) Explain why the bottom-up approach to budgeting is considered a more successful management technique than a top-down approach.
(2) Provide an example of implementation of the bottom-up approach to budgeting.

Robert · Accepted Answer

A) Bottom up budgeting is a type of budgeting that attempts to 
determine the underlying costs for each individual department 
or segment of an organization and then total up each 
department. It is also called participative budgeting because of 
the participation required at all levels, starts with a list of things 
individual departments want or plan to do such as projects, 
assign a cost to each project, and then totals up all the project 
in each department to arrive at an overall budget number. 
 
Since the budget is prepared by the employees involved in the 
work, it gives a more real and accurate estimation of costs and 
expenses which the company needs to check upon.

Good management includes good budgeting. (1) Explain why the bottom-up approach to budgeting is considered a more successful management technique than a top-down approach. (2) Provide an example of...

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