15, Mariam Jennifer Lawrence, 2103480 1. Which budget(s) should be prepared first? The first budget to be prepared is the sales budget. Because the production budget and all other budgets for the firm are generated from the sales budget, it is the first budget to be produced. If sales are predicted to be poor, the firm does not require as much inventory or salespeople, for example. If sales are predicted to be strong, however, more of each of these resources will be needed. 2. Top-down vs bottom-up budgeting, which one you prefer? A top-down budgeting approach is often faster than a bottom-up one, and it can also provide organisational transparency into overall expenditures. The primary benefit of bottom-up budgeting is that it is generally quite precise. Each department's costs, resources, expenses, and needs are best understood by those in charge of them. It can also enhance employee morale because when individuals are given the responsibility of setting their own budgets, they are more likely to work hard to fulfil business objectives. Increased job satisfaction and a sense of ownership are possible outcomes.