Tran has worked for West End Manufacturing for the last three years as production manager for the company's skateboard assembly line. He was recently promoted to plant manager. He received the next year's budget from finance. In reviewing the budget, he noticed that there is not any money budgeted for a new piece of equipment he wants to buy to speed up the skateboard assembly line. When he asks about adding money to the budget for the new piece of equipment, he is told that budget cannot be changed. Which of the following is true?
A) Because Tran cannot change the budget, West Manufacturing is using an imposed budget.
B) By identifying new equipment for the production line, West End Manufacturing is using a participative budget.
C) Tran will need to balance revenues with expenses before he can change the budget.
D) Tran will need to update the previous period's balances before he can change the budget.

Question

Quizplus · Accepted Answer

When a budget is developed by management at a higher level without input from the management levels that perform the work, the budget is considered to be an imposed budget.

Tran Has Worked for West End Manufacturing for the Last