Reference no: EM132657027
Problem 1: Which one of the following is not considered to be a benefit of participative budgeting?
a. The budget estimates are prepared by those in direct contact with various activities.
b. Individuals at all organizational levels are recognized as being part of the team; this results in greater support of the organization.
c. Managers are held responsible for reaching their goals, and they cannot shift their responsibility by blaming the unrealistic goals demanded by the budget.
d. When managers set the final targets for the budget, top management need not be concerned with the overall profitability of current operations. (cma)
Problem 2: Budgetary slack can best be described as (cma)
a. The planned overestimation of budgeted expenses.
b. A plug number used to achieve a preset level of operating income.
c. The elimination of certain expenses to enhance budgeted income.
d. The planned underestimation of budgeted expenses.
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