Question

Please do some research on top down vs bottom up budgeting. In your post describe the differences between each of these styles of budgeting. Then describe the advantages and disadvantages of each. Then I would like you to state which method you would employ if you were able to choose the method at a company you worked for. Why did you pick the method that you did?

Answer 1

Bottom up budgeting sometimes referred to as participative budgting because of the participation requires at all levels start with a light of things individual departments want or plan to do such as projects assigns a cost to each project and then total up all the projects in each project to arrive at an overall budget number a more typical approach known as top down budgeting is when you develop a total budget across the organization and then break it down into various pieces and departments

Advantages and disadvantages:

On the positive side this is type of budgeting is typically very accurate because of the amount of detail invested in examining projects and assigning costs because of the high level of participation from across departments bottom up budgeting is also appealing because there is ownership of the budget and department leaders have some way in how their budget was determined