Question

One budgeting approach is for top management to set the facility management budget. The goal is to reflect the organization’s strategic objectives and control the decisions. Which type of approach is this?

Participative budgeting

Flexible budgeting

Zero-Based budgeting

Authoritative Budgeting

Answer 1

Answer : Authoritative Budgeting

In an authoritative budget process the senior management is given control over the decision-making process. There is much less employee participation in this type of budgeting. Communication between top management and lower-level management and employees is less in an authoritative budgeting process.

On the other hand, Participative budgeting is a process under which bottom level people also are actively participated in the budgeting process.

A flexible budget is a budget which is flexible in nature and adjusts with changes in company's level or volume of activity.

A zero-based budget starts from a zero base or from scratch rather than based on previous budgets.