What is "budgetary slack"?
A)It is the tolerance that is built into budgets to recognize that actual results will not match budgeted projections exactly.
B)It is the process where managers intentionally underestimate budgeted revenues or overestimate budgeted expenses in order to make it easier to achieve budgetary goals.
C)It is the amount that actual results vary from budgeted projections as reported at the end of the budget period.
D)It is the process where upper management underestimates budgeted revenues or overestimates budgeted expenses in order to motivate lower management.

Question

Quizplus · Accepted Answer

Budgetary slack is the practice of intentionally overestimating expenses or underestimating revenues in order to make it easier to achieve budgetary goals. This allows managers to have some room for error or unforeseen circumstances, but it can also lead to wasteful spending or missed opportunities.

What Is "Budgetary Slack