h Budgetary slack is created when:a. The differences between actual and budgeted amounts are the result of unintentional errors.b. The differences between actual and budgeted amounts are due to unforeseen circumstances.c. The differences between actual and budgeted amounts are the direct result of deliberately-introduced bias.d. All of the above.

C. This term best describes budgetary slack, which is deliberately distorted to make the budget…

Answered: Budgetary slack is created when: a. The…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 2DQ: Briefly describe the type of human behavior problems that might arise if budget goals are set too...

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Similar questions

Identify the false statement related to elements of budgeting: a. System of reporting should be made optional. b. Availability of working capital should be ensured. c. Good system of accounting should be maintained. d. Authority and responsibility should be properly fixed
When budgeted and actual results are not the same amount, there is a budget a. error. b. difference. c. anomaly. d. by-product.
2. Explain a reason for a person to commit budgetary slack.
indicate yes if it describes a potential benefit of budgeting orno if it describes a potential negative outcome of budgeting. Budgets are useful in assigning blame for unexpected results.
1. Define budgetary slack. 2. Explain a reason for a person to commit budgetary slack.
Suggest, as a budget accountant, what procedures you would advise in order to minimize the likelihood of such biased estimate arising.
1. Explain the concept of responsibility accounting and its relation with budgeting.2. Explain how the choice of the type of responsibility center (cost, revenue, profit, orinvestment) affects behavior.3. Discuss the concept of “budgetary slack”
Which of the following is true of budgeting? a.Budgeting relies on the control cycle to design the planning cycle for future action. b.Budgeting eradicates the need for keeping a buffer against uncertainties in demand. c.Budgeting focuses only on long-term objectives as covered by the planning cycle. d.Budgeting forces management to plan for the future. e.Budgeting creates a plan of action only in terms of production units.
What are the advantages and disadvantages of bottom-up budgeting process? What is budgetary slack? Please provide one example of budget slack.
Which of the following statements is false? (You may select more than one answer.)a. A flexible budget is used for control purposes and a static budget is used for planning purposes.b. A flexible budget is prepared at the end of the period and a static budget is prepared at the beginning of the period.c. A flexible budget is not useful for controlling variable costs.d. A static budget provides budgeted estimates for one level of activity.
How are the responsibilities of accounting systems different than administrative systems? What is the difference between a cash basis versus an accrual basis for accounting purposes? How do internal control standards increase accountability for procurements? What are some common causes of budget variance?
What assumption is implicitly made about cost behavior when a budget is directly compared toactual results? Why is this assumption questionable?

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