Which of the following is a limitation of using past performance as a basis for judging actual results? Choose below: 1. It does not account for productivity increases over the periods 2. It assumes inefficiencies of previous periods without considering possible efficiencies of the budget period 3. It increases the tendency of senior managers exaggerating changes in future conditions as opposed to changes in current conditions 4. It increases the incentive for managers to introduce budgetary slack
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Which of the following is a limitation of using past performance as a basis for judging actual results?
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