Establishing Budgeted Amounts

question 66

Essay

Establishing budgeted amounts
(a)The text discusses two basic philosophies as to the levels at which budgeted amounts should be set.Identify and describe briefly each of these two philosophies.
(b)Which of the two management philosophies would be more likely to elicit the following comment?
"At our company,budgeted revenue is set so high and budgeted costs so low that no department can ever meet the budget.This way,department managers can never relax;they are motivated to keep working harder no matter how well they are already doing."

---

Definitions:

Needy Families

Refers to households that require financial assistance or social support to meet their basic needs.

Statistical Discrimination

The practice of judging an individual on the basis of the average characteristics of the group to which he or she belongs rather than on his or her own personal characteristics.

Occupational Discrimination

Unfair treatment of workers based on race, gender, age, religion, or other personal characteristics unrelated to job performance.

Pretax Income

The total income earned by an individual or a business before any taxes are deducted.