CASE
Scenario - Martina Gomez
The yearly auditing review of Aztec Industries is scheduled for next month. Martina Gomez is preparing for that audit and is also preparing her budget for the coming year.
-In planning and budgeting for the next 12 months, Martina is participating in a budgeting process in which lower-level manager's budget their department's resource needs and pass them up to top management for approval. This budget process is an example of
A) zero-based budgeting.
B) bottom-up budgeting.
C) top-down budgeting.
D) balance sheet budgeting
E) none of these.

Question

Quizplus · Accepted Answer

The budgeting process being described, in which lower-level managers create their own departmental budgets and pass them up to top management for approval, is an example of bottom-up budgeting. Zero-based budgeting involves justifying every expense from scratch, top-down budgeting involves upper management setting the budget for lower levels, and balance sheet budgeting involves creating a budget based on the company's financial position. None of these options fully match the scenario, but bottom-up budgeting is the closest fit.

CASE Scenario - Martina Gomez