The condition that exists when managers deliberately underestimate revenues or overestimate costs to provide flexibility is called:
A)Realistic standards
B)Monetary incentives
C)Budgetary slack
D)Management by exception

Question

Quizplus · Accepted Answer

The condition described is called budgetary slack, which is the intentional padding of budget estimates to provide flexibility in case actual results are not as good as expected. Realistic standards refer to setting achievable goals and targets, while monetary incentives are rewards given to employees for achieving certain goals. Management by exception is a management approach where managers only focus on significant deviations from expected results. None of these options fully describe the situation described in the question.

The Condition That Exists When Managers Deliberately Underestimate Revenues or Overestimate