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Which one of the following statements best describes budgetary slack?

A. The practice of management assigning relaxed budgetary goals after the company achieves the first several months of the annual budget.

B. The total amount that actual expenses are below budgeted expenses and actual revenues exceed budgeted revenues.

C. The practice of understating budgeted revenues or overestimating budgeted costs to make budgeted targets more achievable.

D. The margin of error assigned to each cost center to encourage the manager to budget accurately and consistently.

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Question added by Ahmed Refaey -CMA- CFC , Finance Manager , Hilights Group
Date Posted: 2015/10/23
Sana Vadsariya
by Sana Vadsariya , assistant vice president , HDB Financial Services

C. The practice of understating budgeted revenues or overestimating budgeted costs to make budgeted targets more achievable.

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