Budgeting slack is most likely to occur when a firm uses the budget only as a planning device and NOT for control.

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Budgeting slack is more likely to occur when a firm uses the budget as a control device rather than just a planning device. When the budget is used for control, managers may overestimate expenses or underestimate revenues to create a cushion or "slack" in case unexpected events occur. This can result in a budget that does not accurately reflect the firm's true financial situation and can lead to inefficient resource allocation.

Budgeting Slack Is Most Likely to Occur When a Firm