US CMA Part 1 · Chapter 2 · Question 6 of 30
Which of the following is the most commonly cited disadvantage of participative (bottom-up) budgeting?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Managers may build budgetary slack into the targets they help to set
Explanation
Participative budgeting improves ownership and uses local knowledge, but it is more time-consuming and gives managers the opportunity to pad their budgets. The other options describe disadvantages of an imposed (top-down) approach, or are simply untrue.
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