Good morning, I would like some help answering this question please. Select the

Question

Good morning,

I would like some help answering this question please.

Select the incorrect statement.

A.

If both the flexible budget and actual results are based on the actual volume of activity, the flexible budget sales variance will be attributable to sales price, not sales volume

B.

Budget slack is the difference between deflated and realistic standards.

C.

Gamesmanship is decreased if superiors and subordinates participate sincerely in setting mutually agreeable, attainable standards.

D.

For performance evaluation, management should compare actual results to a flexible budget based on the actual volume of activity.

Thank you!

A.

If both the flexible budget and actual results are based on the actual volume of activity, the flexible budget sales variance will be attributable to sales price, not sales volume

Explanation / Answer

Answer

All statment are correct except:

B.Budget slack is the difference between deflated and realistic standards.

Because

Budget Slack- Difference between inflated and realistic standards

Budgetary slack is the deliberate under-estimation of budgeted revenue or over-estimation of budgeted expenses. This allows managers a much better chance of "making their numbers," which is particularly important for them if performance appraisals and bonuses are tied to the achievement of budgeted numbers.

Related Questions

Navigate

• Browse (All)
• Browse G
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.