What is an advantage of top-down budgeting?

Top-down budgeting offers the advantage of greater control over the budget process because it is typically initiated and managed by senior management. This approach ensures that the budget aligns closely with the overall strategic objectives of the organization. Senior leaders can set priorities that reflect the business’s goals and allocate resources accordingly, which can lead to more coherent and aligned financial planning.

In a top-down budgeting environment, the involvement of senior management means there is a streamlined process for decision-making. This can often result in efficiency and consistency across departments. Additionally, it allows for quick adjustments to the budget as necessary given the wider perspective that senior management holds regarding the company's financial state and objectives.

The other options highlight different budgeting scenarios that do not align with the nature of top-down budgeting. For instance, while more input from junior staff might suggest a participative approach, top-down budgeting limits such contributions. Similarly, the suggestion of ignoring corporate objectives contradicts the very essence of this approach, which is to enhance alignment with those objectives. Lastly, lower costs of allocation can vary and are not a specific characteristic of top-down budgeting when compared to other methods.