Managers plan _____ in a budget in order to provide a cushion for unexpected events or improve the appearance of operations.
A) budgetary slack
B) favorable variance
C) budgetary margin
D) opportunity gap

Question

Quizplus · Accepted Answer

Budgetary slack is the intentional overestimation of expenses or underestimation of revenues in a budget in order to create a cushion for unexpected events or to make actual results look better compared to the budgeted results. Favorable variance represents actual results that are better than budgeted results, but it is not necessarily intentional. Budgetary margin and opportunity gap are not commonly used terms in budgeting.

Managers Plan _____ in a Budget in Order to Provide