What Is Budgetary Slack

question 17

Multiple Choice

What is budgetary slack?

• A) Deviations from the budget
• B) A budget with easy targets
• C) Budget process not supported by top management
• D) A bottom-up approach to budgeting

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Definitions:

Net Income

The amount of profit that remains after all operating expenses, taxes, and costs have been subtracted from total revenue, essentially the bottom line.

Break-Even Point

The point at which total costs and total revenue are equal, resulting in neither profit nor loss.

Fixed Costs

Expenses that do not change with the volume of production or sales, such as rent, salaries, and insurance.

Variable Cost

A cost that varies with the level of output or activity, in contrast to fixed costs, which remain constant regardless of activity.