Goals Achievement: Chapter Twenty-One
Budgets serve to formalize the planning process but ordinarily should not serve as a basis for performance evaluation.
In large organizations a benefit of the budgeting process is to assist in communication and coordination of company plans and objectives.
Which budget approach rarely involves lower-level personnel during the budget construction process?
The bottom-up budgeting process is a dictatorial approach which is generally met with resentment and a who cares attitude.
The bottom-up budgeting approach can be described as:
Another term for budgetary slack is:
Slack may permeate the entire budgetary process and sometimes tends to perpetuate itself.
The budget process may consist of several rounds with changes and refinements being added along the way.
Capital expenditure budgets may cover a long-term horizon of as much as five to ten years.
For purposes of control and evaluation, operating budgets should not be subdivided into quarters or months.
Budgeting is an effective tool to reduce costs and eliminate the need for active day-to-day management.
Perhaps the most significant limitation of budgeting is the:
A budget process which results in the preparation of a comprehensive set of integrated budgets that serve as a financial plan for the entire organization is a:
Which of the following types of budgets serve as the beginning of the entire budgetary process?
The direct material purchases budget probably depends most significantly on the:
Because fixed factory overhead costs tend to be the same no matter the volume, they should not be included in the total factory overhead budget.
Which type of budgets offer the advantage of forcing management to continually think about the future?