What is budgetary slack? Why might managers try to build slack into their budgets?

Q: How does doing budget benefit companies?

A: Budgeting is an important part of the business process. Without budgeting a business cannot track…

Q: What is the major benefit of tying a budget to the overall goals of the compan

A: Budgeting is an important part of the business process. Without budgeting a business cannot track…

Q: How can budgeting assist a company in planning its workforce staffing levels?

A: Budget: Budget is an effective tool to achieve the financial and operational goals of the business.…

Q: What is the difference between a static budget and a flexible budget?

A: The question has covered the concept of Static Budget and Flexible Budget. That is discussed below,…

Q: How are budgets used as monitoring and control tools?

A: Budgets are quantitative statements that contain the details of the planned revenues, expenditures,…

Q: Why do companies prepare budgets?

A:

Q: Why might managers find a flexible-budget analysis more informative than a static-budget analysis?

A: Static Budget: Static budget is a fixed budget prepared for a particular period of time without…

Q: Why might a rolling budget require more management participation than an annual budget?

A: Budget: It is an estimated and effective way of the utilization of funds for the financial control…

Q: What functional role do management accountants play in the budgeting process?

A: A budget is a type of financial plan that is used by managers to estimate revenues and expenses for…

Q: Why is budgeting process time consuming?

A: Budget -  Budget are a financial plant of the company prepared by the company every year and it will…

Q: How does a continuous budget work? Is a rolling budget the same thing?

A: A budget is used to forecast a company's financial results and financial status for the future. It's…

Q: Which approach is most likely to result in employee buy-in to this budget?

A: A budget is prepared as an estimate of company's future revenues and expenses. A comparison of…

Q: for a person to commit budgetary slack

A: Budgetary slack refers to the concept when the estimated expenses or revenues of a project are…

Q: What are the benefits of budgeting?

A: Budgeting is the process of designing, implementing, and operating budgets. It is the managerial…

Q: Why is it common to find slack in budgets?

A:

Q: What are the benefits of making an operating budget?

A: Operating Budget: The operating budget is that budget which is prepared to plan all the operating…

Q: What assumption is implicitly made about cost behavior when all of the items in a budget areadjusted…

A: Definition: Static Budget: A budget that doesn’t changes with the volume of activity throughout the…

Q: What are some challenges and weaknesses that a firm may find in the budgeting process?

A: The lack of proper monitoring and review, lack of clear policy and procedures on budgets, poor…

Q: What are the primary differences in budgeting between manufacturing and nonmanufacturing firms?

A: The primary difference between  a manufacturing firm and a non-manufacturing firm is that the…

Q: What is a flexible budget? Explain how a flexible budgetincreases the usefulness of budgeting as a…

A: A flexible budget is a budget that can be easily adjusted to reflect the changes in the volume of…

Q: Can budgets be used in non-manufacturing companies?

A: Budget involves estimation of revenues and expenses of an entity over a specific period of time.

Q: What is a flexible budget and how does it differ from a static planning budget?

A: A flexible budget is a budget which can be adjusted to changes in volume or activity on which budget…

Q: how budgeting is useful in managing businesses?

A: Budget: The forecast of transactions on the basis of the available resources for a particular period…

Q: Why is the sales forecast the starting point in budgeting?

A: Master Budget:   The master budget is a collection of budgets that is used by the company for…

Q: How does management use an operating budget?

A: All companies, large and small, have limits on the amount of money or resources they can receive and…

Q: Why are human factors critical in budgeting?

A: budgeting is such a process under which a detail plan of spending of the businesses is done in order…

Q: What are some of the dangers associated with failing to develop and manage budgets?

A: The following are the dangers associated with failing to set and manage budgets: 1) Incorrect…

Q: What behavioral problems are associated with setting a budget too loosely

A: Budget:   Budget is an effective tool to present the estimated actions for future time period. It…

Q: Should a manager blame his subordinates if a budget target is not achieved? Explain briefly! Give a…

A: Answer: Budget target is the statement which includes the target that is maintained as part of…

Q: What does a flexible budget performance report do that a simple comparison of budgeted to actual…

A: Flexible budget performance report:   A tool used to compare the actual and budgeted results…

Q: Define the term budgetary slack, and briefly describe a problem it can cause.

A:

Q: Why is flexibility very important for PFG’s budgeting system to be effective?

A: PFG stands for Penn Fuel Gas, Inc. It is a public utility holding company selling natural gas,…

Q: what are the differences between top down and beyond budgeting?

A: Budgeting is the process of estimating the income and expenditure to control the actual income and…

Q: How can an organization help to reduce the problems caused by budgetary slack?

A: Definition: Budgetary slack: The manager intentionally creates a slack into the budget as to avoid…

Q: Why would a company use zero-based budgeting,given that it requires more time and effort from…

A: Budgets are the forecasts or estimates that are made for future period of time. Process of making…

Q: What is the key difference between a static budget and a flexible budget?

A:

Q: Explain the phrase: "Beyond Budgeting: Managing without budgets"

A: Solution:- Beyond Budgeting: - Beyond Budgeting is the idea of abolishing traditional budgeting…

Q: since flexible budget is more accurate in measuring performance, can company just develop flexible…

A: A static budget is the starting point for the company. When the business term is six months, for…

Q: How important is a purchases budget and how does it help managers run a company?

A: budget is prepared by the company in order to estimate the income and expenditure that is to be done…

Q: What are the difficulties that might face by management accountant in budgeting process?

A: The budgeting process is used in financial planning which includes setting goals and gathering data…

Master Budget

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making. 

Sales Budget and Selling

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.