On October 31,2013,Janie Mounce,manager of a department in the largest division of the XYZ Company,was contacted by the chairman of the budget committee.Janie needed to send her 2014 departmental budget to the committee.Instructions from the chair of the committee to all the department managers indicated that any revenue or expense items that deviated more than 5% from last year's budget needed a written explanation to be turned in with the budget.

Required:

Describe XYZ’s budget process as a top-down or bottom-up approach. What are the advantages and disadvantages of this budget process?

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Required:

Describe XYZ’s budget process as a top-down or bottom-up approach. What are the advantages and disadvantages of this budget process?

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The Answer of On October 31,2013,Janie Mounce,manager of a department in the largest division of the XYZ Company,was contacted by the chairman of the budget committee.Janie needed to send her 2014 departmental budget to the committee.Instructions from the chair of the committee to all the department managers indicated that any revenue or expense items that deviated more than 5% from last year's budget needed a written explanation to be turned in with the budget.

Required:

Describe XYZ’s budget process as a top-down or bottom-up approach. What are the advantages and disadvantages of this budget process?

On October 31,2013,Janie Mounce,manager of a Department in the Largest