Which type of budget allows a manager to spend the budgeted amount according to their discretion?

The functional area budget is designed to give managers the flexibility to allocate resources within their respective departments according to their specific needs and priorities. This type of budget outlines the expected revenue and expenses for a particular functional area, such as marketing, production, or human resources, and managers have the discretion to manage the spending to meet their departmental goals, responding to changing circumstances or priorities as needed.

This flexibility allows for more adaptability in managing resources, enabling managers to make decisions that are most beneficial for their team's performance and the organization as a whole. It emphasizes the importance of managerial judgment in utilizing the budget effectively to achieve functional objectives, rather than adhering strictly to externally imposed limits without consideration for the operational realities.

In contrast, other types of budgets, such as project budgets or task budgets, are generally more rigid, specifying exact amounts for specific projects or tasks which may not leave as much room for discretionary spending.