The Following Events Took Place When Managers A, B, and C

question 81

Multiple Choice

The following events took place when Managers A, B, and C were preparing budgets for the upcoming period:
I. Manager A increased property tax expenditures by 2% when she was informed of a recent rate hike by local authorities.
II. Manager B reduced sales revenues by 4% when informed of recent aggressive actions by a new competitor.
III. Manager C, who supervises employees with widely varying skill levels, used the highest wage rate in the department when preparing the labor budget.
Assuming that the percentage amounts given are reasonable, which of the preceding cases is (are) an example of building slack in budgets?

• A) I only.
• B) II only.
• C) III only.
• D) I and II.
• E) II and III.

---

Definitions:

Forgeries

Illegal alterations or productions of documents, currency, or other items with the intent to deceive.

Customer's Bank Account

The bank account of a customer, used for transactions between the customer and a company.

Restrictive Endorsement

An endorsement on a check or other financial instrument limiting the way the funds can be used or restricting further endorsement.

Endorsed

Endorsed refers to the approval or support, often given formally or officially to signify agreement with or sanction of something.