Which budgeting approach funds a variety of departments and divisions?

• A. Matrix budgeting
• B. Line-item budgeting
• C. Program budgeting
• D. Flexible budgeting

Answer: (A)

Cross-functional funding is the idea here: resources are allocated across both programs and departments, often in a grid that ties departments to specific programs or projects. This setup lets a variety of divisions receive support for joint initiatives and ensures that cross-department needs are funded, not just what a single department requests in isolation.

Line-item budgeting sticks spending to departmental line items and is focused on objects of expenditure, not on cross-departmental collaboration. Flexible budgeting adjusts the amount based on activity levels but doesn’t inherently structure funding across multiple departments. Program budgeting organizes funds by programs, which can involve several departments, but the emphasis is on programs rather than directly coordinating resources across many departments as needed for shared projects. Matrix budgeting, by contrast, explicitly aligns funding with both programs and departments, enabling cross-cutting support and shared initiatives.