See, I always cut my batting (I'm assuming that's what you meant in the first part of your sentence) even, and with scissors, because for me, it's easier than laying it all out and cutting with a rotary cutter. I don't have a lot of room here. If I had to cut it 1/8" beyond, I would not be able to do it evenly (I have carpal tunnel syndrome so doing it even is tough enough). I guess for a small quilt that I had room to lay out on a big mat it would work.
I'm still trying to perfect my binding. I like the binding to look full but 2.5" to start out isn't quite full with a 1/4" seam allowance so I was thinking that maybe 2.25" would be better.