Which of the Following Is Not a Benefit of Participative

question 104

Multiple Choice

Which of the following is not a benefit of participative or grassroots budgeting?

• A)The process of participative budgeting can be time consuming.
• B)Participating budgeting enhances employee motivation and acceptance of goals.
• C)Participative budgeting provides information that enables employees to associate rewards and penalties with performance.
• D)Participative budgeting yields information that employees know but managers do not know.

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Definitions:

Operating Leverage

A measure of how sensitive a company's operating income is to a change in its sales volumes, reflecting the proportion of fixed costs in a company's cost structure.

Financial Break-Even

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

Salvage Value

The estimated residual value of an asset at the end of its useful life.

Cash Break-Even

The point at which a business's cash inflows equal its cash outflows, excluding financing or investment income.