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may create a flexible budget
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∙ 14y ago
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What are the consequencies of budgetary slack?
The consequences of budgetary slack is that members of the team will spend more money in order to take up the slack. Management should set the budget with no slack.
How bonus program can encourage budgetary slack?
it does not
Consequences of budgetary slack?
Budgetary slack is a strategy that actively works to prevent a budget from working as designed. The consequence can be a business or project that fails due to apparently faulty budgeting.
How do you conceal budgetary slack?
You are not supposed to ask that question on the net. Pranil
What steps can be taken to prevent budgetary slack?
budget slack can be prevented by good alignment between budgeting process and the organization's strategy which achieved by communication and coordination between top management and line managers or strategic business units to ensure that all line managers have the same perspective about achieving the organizational goals.good implementation of budgetary control also plays a role in preventing budgetary slack.
What are the behavioral Implications of Budgeting?
behavioural implications of budgeting are, budgetary slack and participative budgeting. budgetary slack tends to happen when the manager of division wants their performance looks good, but in the wrong way by padding the budget. therefore, they looks like "beat the budget". participative budget can cause delay andvacillation.
What Budgetary Slack is also known as?
It provides flexibility for operating under unknown circumstances, such as an extra margin for discretionary expenses in case budget assumptions on inflation are incorrect.
Why is the use of budgetary slack unethical?
According to the IMA Statement of Ethical it violates competence or the accurate, clear, concise and timely information. It violates integrity and the credibility of information
Advantages and disadvantages of budgetary slack?
Advantages: It provides flexibility for operating under unknown circumstances, such asan extra margin for discretionary expenses in case budget assumptions oninflation are incorrect or adverse circumstances arise. Additional slack may be included to offset the costly setups from designchanges and/or small lot size orders. The increased pressure to meet current year earnings per share targets mayresult in postponing expenditures into the next year or aggressively pullingsales into the current year. Budgetary slack in the next year may compensatefor shifting those earnings from next year into the current year.Disadvantages: It decreases the ability to highlight weaknesses and take timely correctiveactions on problem areas. It decreases the overall effectiveness of corporate planning. Actions such aspricing changes or reduced promotional spending may be taken from aperceived need to improve earnings when eliminating the budgetary slackcould accomplish the same objective without marketplace changes. It limits the objective evaluation of departmental managers andperformance of subordinates by using budgetary information
Bases for market segmentation?
Budgetary slack will encourage team members to spend more than they have to in order to meet budget requirements. Management should set the budget at an exact number, or reduce it to save money.
Advantages and limitations of budgetary control?
One advantage of budgetary control is the fact that managers can control spending. A disadvantage to budgetary controls is that it may limit innovation.
What makes budgetary accounting different from conventional accounting?
what makes budgetary accounting different from conventional accounting
