Consider the Following Statements About Budgetary Slack

question 17

Multiple Choice

Consider the following statements about budgetary slack:
I. Managers build slack into a budget so that they stand a greater chance of receiving favorable performance evaluations.
II. Budgetary slack is used by managers to guard against uncertainty and unforeseen events.
III. Budgetary slack is used by managers to guard against dollar cuts by top management in the resource allocation process.
Which of the above statements is (are) true?

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

---

Definitions:

Harmony

A state of peaceful understanding and cooperation among individuals or groups, characterized by lack of conflict and mutual compatibility.

Short Run

In the short run, refers to a period of time during which certain conditions or variables are viewed as fixed, often used in economic contexts to analyze immediate effects.

Escalating Argument

A disagreement that intensifies in severity or intensity over time, often leading to heightened conflict.

Intervene

To come between disputing people, groups, or forces in order to prevent or alter a result or course of events.