The practice, which makes target more achievable by underestimating revenues or overestimating cost is called _____________?
Correct answer: C. budgetary slack
- A. cost slack
- B. target slack
- C. budgetary slack
- D. revenue slackAccounting & Auditing
Explanation
Budgetary slack occurs when managers deliberately understate expected revenues or overstate expected costs, making the target easier to achieve. The other forms of slack are not the standard term for this budgeting practice.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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