Explain the reason for overbudgeting

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Question - Rubick is an employee of Radiant Financial Corporation Ltd. He has been assigned the task of preparing a budget for the company. He observed that in the previous year budget was prepared on the basis of the previous year's figures and in various cases either the budgeted amount was lying unutilized or it fell short. He wants to avoid such a situation in the future Budgetary Process.

Explain the reason for overbudgeting/shortfall in the above-listed case. Which of the budgetary technique should be used by Rubick so as to avoid Over Budgeting/Short Budgeting. Please elaborate on your insight.

Reference no: EM133126387

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