Which of the following is an example of padding the budget?
A) Overestimating sales
B) Underestimating labour costs
C) Overestimating direct material costs
D) Underestimating capital expenditure

Question

Quizplus · Accepted Answer

Padding the budget refers to inflating the estimated cost of a project or overestimating the expenses to ensure that enough money is available in case of unexpected events. Overestimating direct material costs is an example of padding the budget as it involves inflating the estimated cost of materials to ensure that enough funds are available.

Which of the Following Is an Example of Padding the Budget