Which of the following is a limitation of using past performance as a basis for judging actual results?
A) It does not account for productivity increases over the periods.
B) It increases the incentive for managers to introduce budgetary slack.
C) It assumes inefficiencies of previous periods without considering possible efficiencies of the budget period.
D) It increases the tendency of senior managers exaggerating changes in future conditions as opposed to changes in current conditions.

Question

Quizplus · Accepted Answer

Using past performance as a basis for judging actual results assumes inefficiencies of previous periods without considering possible efficiencies of the budget period. This can be a limitation as the current budget period may have new efficiencies that could lead to better results than previous periods.

Which of the Following Is a Limitation of Using Past