Establishing budgeted amounts
(a)The text discusses two basic philosophies as to the levels at which budgeted amounts should be set.Identify and describe briefly each of these two philosophies.
(b)Which of the two management philosophies would be more likely to elicit the following comment?
"At our company,budgeted revenue is set so high and budgeted costs so low that no department can ever meet the budget.This way,department managers can never relax;they are motivated to keep working harder no matter how well they are already doing."

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The Answer of Establishing budgeted amounts
(a)The text discusses two basic philosophies as to the levels at which budgeted amounts should be set.Identify and describe briefly each of these two philosophies.
(b)Which of the two management philosophies would be more likely to elicit the following comment?
"At our company,budgeted revenue is set so high and budgeted costs so low that no department can ever meet the budget.This way,department managers can never relax;they are motivated to keep working harder no matter how well they are already doing."

Establishing Budgeted Amounts