Participative budgeting has which of the following potential problems?
A)building slack into a budget
B)encourages individual behavior that is in basic conflict with the goals of the organization
C)using budgets as a part of performance evaluations could lead to unethical behavior
D)managers take action that will improve performance in the short run but has long-term consequences

Question

Quizplus · Accepted Answer

Participative budgeting can lead to building slack into a budget as managers may overestimate expenses or underestimate revenues to make targets easier to achieve.

Participative Budgeting Has Which of the Following Potential Problems