Home
/
Business
/
Question 4 Which of the following statement(s) is/are true about the budget slack? (Select the correct answer from those listed below the following statements). (1) Budget slack is the deliberate under-estimation of costs and over estimation of revenue (2) Budget slack is the difference between the budgeted, and the actual units of production (3) Budget slack is the deliberate over-estimation of costs and under -estimation of revenue (4) Budget slack is the deliberate falsification of costs and revenues by managers, which is deemed unethical (3) and (4) are correct (1), (2) and (3)are correct (1) and (3) are correct (1) and (4) are correct 4

Question

Question 4
Which of the following statement(s) is/are true about the budget slack? (Select the correct answer from
those listed below the following statements).
(1) Budget slack is the deliberate under-estimation of costs and over estimation of revenue
(2) Budget slack is the difference between the budgeted, and the actual units of production
(3) Budget slack is the deliberate over-estimation of costs and under -estimation of revenue
(4) Budget slack is the deliberate falsification of costs and revenues by managers, which is deemed
unethical
(3) and (4) are correct
(1), (2) and (3)are correct
(1) and (3) are correct
(1) and (4) are correct
4

Question 4 Which of the following statement(s) is/are true about the budget slack? (Select the correct answer from those listed below the following statements). (1) Budget slack is the deliberate under-estimation of costs and over estimation of revenue (2) Budget slack is the difference between the budgeted, and the actual units of production (3) Budget slack is the deliberate over-estimation of costs and under -estimation of revenue (4) Budget slack is the deliberate falsification of costs and revenues by managers, which is deemed unethical (3) and (4) are correct (1), (2) and (3)are correct (1) and (3) are correct (1) and (4) are correct 4

expert verifiedVerification of experts

Answer

4.2249 Voting
avatar
LeonoraElite · Tutor for 8 years

Answer

(3) and (4) are correct.

Explain

## Step 1: <br />Understand the concept of budget slack. Budget slack is generally described as the intentional overstatement of costs or understatement of revenues in the budget, which allows for easier achievement of budget targets. <br /><br />## Step 2: <br />Examine each available answer in light of this understanding, and eliminate the options that don't align with our definition of budget slack.<br /><br />### Statement (1) <br />Budget slack is the deliberate under-estimation of costs and over-estimation of revenue. This option contradicts with our understanding of the definition. So, choice (1) cannot be genuine. <br /><br />### Statement (2) <br />Budget slack is the difference between the budgeted, and the actual, units of production. While this may define a difference in budgeting outcomes, it doesn't capture the essential goal of budgetary slack, which is intentional under / over estimation. <br /><br />### Statement (3) <br />Budget slack is the deliberate over-estimation of costs and under-estimation of revenue. This statement corresponds exactly with our understanding of budget slack.<br /><br />### Statement (4) <br />Budget slack is the deliberate falsification of costs and revenues by managers, which is deemed unethical. This statement also aligns with the intention behind budgetary slack, even if it introduces the aspect of ethics. <br /><br />## Step 3: <br />Since Statements (3) & (4) are considered to be accurate according to our comprehension of the budget slack, the final answer should be out of the options involving these two.
Click to rate:

Hot Questions

More x