Which of the following is a disadvantage of participative budgeting?
A)It is considering to be rolling throughout each budget period.
B)Managers may pad the budget.
C)It is a method of tactical planning.
D)It requires each amount to be justified each budget period.

Question

Quizplus · Accepted Answer

One disadvantage of participative budgeting is that managers may inflate their budgets to ensure that their department has adequate resources. This is referred to as "padding the budget" and can lead to a lack of accuracy in budgeting. The other options are not disadvantages of participative budgeting. Option A is not a disadvantage, but a characteristic of rolling budgets. Option C is incorrect because participative budgeting can be used for both tactical and strategic planning. Option D is incorrect because justifying each amount is a requirement of participative budgeting, not a disadvantage.

Which of the Following Is a Disadvantage of Participative Budgeting