Which of the following is not an example of conflicts created in the budgeting process?
A)Because firms want to use the most up-to-date information about local operating conditions, they ask lower-level employees for this information, but these employees may not be forthright in sharing their information.
B)Because a production manager may be overly pessimistic about expected costs, the quality of information used to plan costs may be reduced.
C)Downplaying expected sales may lead to more achievable targets for the managers, but reduce the quality of information used to plan sales.
D)The planned targets in budgets become the benchmark for actual results, thereby facilitating control.
E)All of the above are examples of conflicts in the budgeting process.

Question

Quizplus · Accepted Answer

Option D is not an example of a conflict in the budgeting process but rather an advantage of the budgeting process. It highlights the ability of the budget to act as a benchmark for actual results, which in turn helps with control. The other options mention conflicts such as employees not being forthright with information, reduced quality of information used to plan costs, and reduced quality of information used to plan sales.

Which of the Following Is Not an Example of Conflicts