Which top-down budgeting method is being employed when expenditures are allocated by assigning a budget based on gut feelings?
A) Arbitrary allocation
B) Percentage of sales
C) Affordable method
D) Payout planning

Question

Quizplus · Accepted Answer

Arbitrary allocation is the method of assigning a budget based on personal perceptions and assumptions rather than objective and systematic analysis. Gut feelings represent a subjective and often haphazard approach to budgeting, which falls under arbitrary allocation. The other options (percentage of sales, affordable method, and payout planning) are more structured and data-driven approaches to top-down budgeting.

Which Top-Down Budgeting Method Is Being Employed When Expenditures Are