Select the incorrect statement.
A) If both the flexible budget and actual results are based on the actual volume of activity, the flexible budget sales variance will be attributable to sales price, not sales volume.
B) Budget slack is the difference between deflated and realistic standards.
C) Gamesmanship is decreased if superiors and subordinates participate sincerely in setting mutually agreeable, attainable standards.
D) For performance evaluation, management should compare actual results to a flexible budget based on the actual volume of activity.

Question

Quizplus · Accepted Answer

Budget slack is actually the difference between the budgeted amount and the expected cost. It is not related to deflated or realistic standards.

Select the Incorrect Statement