Answered: Discuss the factors that are likely to…

Discuss the factors that are likely to cause managers to submit budget estimates of sales and costs that do not represent their best estimate or expectations of what will actually occur.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 14DQ

See similar textbooks

Related questions

Q: Which of the following statements about budgeting is incorrect? a. Budgets provide direction and…

A: a ) Budgets provide direction and coordination. This statement is correct because budgeting…

Q: If a manager builds slack into a budget, how would that manager handle estimates of revenues and…

A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: Discuss the factors that are likely to cause managers to submit budget estimates of sales and costs…

A: Budgetary slack: Creating an extra gap in the budget is known as budgetary slack which refers to…

Q: Briefly describe the type of human behavior problems that might arise if budget goals are set too…

A: Budget is a tool which is used in the planning and controlling process by estimating the revenue and…

Q: managers duty to take appropriate action when accounting reports indicate

A: Managers are involved in planning and implementing appropriate actions to lead the organization…

Q: Which one of the following best describes the role of top management in budgeting process? Top…

A: Role of top-level management in the budgeting process - - management must make that all the levels…

Q: Why might managers find a flexible-budget analysis more informative than a static-budget analysis?

A: Static Budget: Static budget is a fixed budget prepared for a particular period of time without…

Q: Define the terms relative-performance (relative-improvement) contract and rolling financial…

A: Relative performance: It is related to the evaluation of the performance of an individual based on…

Q: When a manager is prohibited to exceed its spending from the allowable budget, it may Select the…

A: The question is related to the Budgetory control. When managers are prohibited to exceed its…

Q: List the three key benefits companies get from preparing a budget. The budget allows managers to be…

A: An estimate of income and expenditure for a set period of time is called budget.

Q: Which of the following statements is incorrect regarding sales forecasting? * O It may involve the…

A: A sales forecast estimates how much your company plans to sell within a certain time period (like…

Q: Which of the following is not a benefit of budgeting? a. It sets some standards to evaluate…

A: Budgeting is defined as the procedure of planning the manner in which the work to be conducted and…

Q: Which of the following statements is incorrect? * O An imposed budget is the same as a participative…

A: Answer: Budget is the statement that is prepared for revenue and expenses as an estimation made by…

Q: Required: Identify the problems that appear to exist in the company’s budgetary control system and…

A: Budgetary Control System:- It is a system in which the actual income and expenditure of the company…

Q: Which of the following is true of a budget? O A. Budgets help managers to revise their plans and…

A: Introduction: Budget: Budget means an estimation for future period with past period data. Branches…

Q: Which of the following explains why managers compare the budgeted costs to actual costs? a.…

A: Managers measures budgeted expenses at the end of the year and provide an average of the costs that…

Q: "budget performance is a better criterion than past performance for judging managers." Do you agree?…

A: The budget is a statement in which the estimated standards are set according to the needs of the…

Q: A company can expect to receive which of the following benefits when it starts its budgeting…

A: Benefits when it starts budgeting process: The benefit of budgeting process is to compare the actual…

Q: indicate yes if it describes a potential benefit of budgeting orno if it describes a potential…

A: A Budget is a summary of expenses prepared by Companies to find the costs to be incurred on…

Q: What assumption is implicitly made about cost behavior when actual results are directly compared to…

Q: Discuss the factors that are likely to cause managers to submit budget estimates of sales and costs…

A: Creating an extra gap in the budget is known as budgetary slack which refers to knowingly…

Q: What are some challenges and weaknesses that a firm may find in the budgeting process?

A: The lack of proper monitoring and review, lack of clear policy and procedures on budgets, poor…

Q: In a company with different business units, individual managers make decisions by changing various…

A: Sensitivity Analysis: Sensitivity analysis is a financial model that shows how modifications in…

Q: Briefly describe the type od human behavior problems that might arise if budget goals are set too…

A: Budgeting is defined as the process or procedure, which used to prepare the plan regarding the…

Q: Explain how standard costs and flexible budgets can be used for short-term profit analysis—that…

Q: How flexible budget through performance reporting is help for the management in determination of…

A: Budgeting refers to preparation of estimated financial data using the past records. Flexible budget…

Q: Which of the following is NOT an objective of the budgeting process? O a. To communicate…

A: Please see the next step for the solution

Q: What limits the usefulness to managers of fixed budget performance reports?

Q: Which of the following statements is false about budgeted income statement and budgeted balance…

A: Budgeted income statement shows budgeted income and expense of the business and at the end it shows…

Q: 'Budgeting has a number of different purposes including: Planning; Control; Performance evaluation;…

A: Budgeting is a process to prepare the financial statement by the manager to estimate the…

Q: Which of the following should not be considered when determining the production budget for an…

A: A budget is prepared by the management to estimate the future event. The production budget is used…

Q: Comparing a static planning budget to actual costs is not a good way to assess whether variable…

A: Budget: Budget is an effective tool to achieve the financial and operational goals of the business.…

Q: Which of the following best describes the role of top management in the budgeting process? Should…

A: Correct option is 3.Should be enthusiastic and committed to the budget process

Q: What does a flexible budget performance report do that a simple comparison of budgeted to actual…

A: Flexible budget performance report: A tool used to compare the actual and budgeted results…

Q: Explain the different reasons why a manager might submit a biased budget estimate.

A: A budget is a financial plan made by the company for a definite period such as for months or years.…

Q: Which of the following is true in a bottom-up budgeting approach? a.Supervisors tell departments…

A: Management adapts the current year's budget to suit future objectives, making changes as needed.…

Q: budget performance is abetter critical than past performance for judging managers" do you agree…

A: For judging the current performance we need a benchmark against which we can see and compare and…

Q: 1. Which of the following is true? a) The direct materials purchase budget is determined from the…

A: As per the honor code, We’ll answer the first question since the exact one wasn’t specified. Please…

Q: Which of the following statements is NOT true?

A: A budget is a document that consists of forecasted income that will be earned and expenditures…

Q: Which of the following statements is false with respect to a budgeted income statement? Its interest…

A: The budgeted income statement is like other income statements which shows all the expenses and the…

Q: What are the difficulties that might face by management accountant in budgeting process?

A: The budgeting process is used in financial planning which includes setting goals and gathering data…

Question

Discuss the factors that are likely to cause managers to submit budget estimates of sales and costs that do not represent their best estimate or expectations of what will actually occur.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Which of the following is not a part of budgeting? A. planning B. finding bottlenecks C. providing performance evaluations D. preventing net operating losses
When would a static budget be effective in evaluating a managers performance?
When compared to static budgets, flexible budgets: a. offer managers a more realistic comparison of budgeted and actual fixed cost items under their control. b. provide a better understanding of the capacity (volume) variances during the period being evaluated. c. encourage managers to use less fixed cost items and more variable cost items that are under their control. d. offer managers a more realistic comparison of budgeted and actual revenue and cost items under their control.
Discuss the factors that are likely to cause managers to submit budget estimates of sales and costs that do not represent their best estimate or expectations of what will actually occur and Suggest, as a budget accountant, what procedures you would advise in order to minimize the likelihood of such biased estimate arising.
1 i. Discuss the factors that are likely to cause managers to submit budget estimates of sales and costs that do not represent their best estimate or expectations of what will actually occur. ii. Suggest, as a budget accountant, what procedures you would advise in order to minimize the likelihood of such biased estimate arising.
what is the managers duty to take appropriate action when accounting reports indicate that expenditures are significantly above or below budget allocations. how do effective managers reduce cost?
Which of the following is not a benefit of budgeting? a. It sets some standards to evaluate performance. b. It uncovers drawbacks of department performance c. It reduces the need to track the actual cost activity d. It formalizes a manager's planning efforts
What limits the usefulness to managers of fixed budget performance reports?
What assumption is implicitly made about cost behavior when actual results are directly compared to a static planning budget? Why is this assumption questionable?
Which of the following is true of budgeting? a.Budgeting relies on the control cycle to design the planning cycle for future action. b.Budgeting eradicates the need for keeping a buffer against uncertainties in demand. c.Budgeting focuses only on long-term objectives as covered by the planning cycle. d.Budgeting forces management to plan for the future. e.Budgeting creates a plan of action only in terms of production units.
budget performance is abetter critical than past performance for judging managers" do you agree ?explain
Which of the following statements are TRUE? I. Responsibility accounting attempts to assign blame for problems to a specific manager.II. One benefit of a budget is that it helps managers gather relevant information for improving future performance.III. Challenging budgets tend to motivate improved performance.IV. Controllability may be difficult to pinpoint because some costs are the result of the market, not the manager.