Suppose that the departmental manager deliberately underestimates the level of sales activity by 10 000 units. What is this practice called?
A) Budgetary participation
B) Appropriate caution
C) Budgetary slack
D) Allowance for uncertainty

Question

Quizplus · Accepted Answer

Deliberately underestimating the level of sales activity is a practice called budgetary slack, which involves intentionally creating a budget with lower targets than what is realistically achievable. This allows the manager to have greater control over their department's performance and to potentially look good if they exceed the budgeted targets.

Suppose That the Departmental Manager Deliberately Underestimates the Level of Sales