"Budgetary Slack" Occurs When

question 110

Multiple Choice

"Budgetary slack" occurs when:

• A)Employees refuse to adhere to budgeted plans and operations.
• B)The budget is so difficult to meet that employees slack-off from work.
• C)An authoritative,or imposed,budgeting process is used.
• D)Employees ask for resources in excess of what they need,in order to "meet" budget objectives.
• E)Employees ask for fewer resources than they need,in order to continuously improve.

---

Definitions:

Planning Budget

A budget created at the beginning of the budgeting period, reflecting the expected costs and revenues based on forecasted levels of activity.

Manufacturing Overhead

All indirect costs associated with manufacturing beyond direct materials and direct labor, such as utilities and rent for the manufacturing facility.

Administrative Expenses

Costs related to the general management and administration of a business, such as salaries of executive officers and costs of the legal department.

Net Operating Income

A financial metric that shows a company's profitability from its core business operations, excluding expenses and incomes from other sources.