Why Are Budgets Useful in the Planning Process

question 177

Multiple Choice

Why are budgets useful in the planning process?

• A) They provide management with information about the company's past performance.
• B) They help communicate goals and provide a basis for evaluation.
• C) They guarantee the company will be profitable if it meets its objectives.
• D) They enable the budget committee to earn their paycheck.

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Definitions:

Efficiency

The ability to accomplish a task or goal with the minimal waste of time, effort, and resources.

Solve Problems

The process of finding solutions to difficult or complex issues.

Alderfer's ERG Theory

A motivational theory positing that there are three groups of core needs: existence, relatedness, and growth, which influence human behavior.

Maslow's Hierarchy

This theory suggests that individuals are motivated by a hierarchy of needs, starting from basic needs such as food and safety to higher needs like esteem and self-actualization.