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A senior manager is concerned about the dysfunctional consequences of a company's current approach to budget preparation. The senior manager has discovered that budget holders are carrying budgetary slack forward from one period to the next without this being identified or challenged.
Which of the following approaches to budget preparation is the company using?
Suggested Answer: A
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12 comments · newest first
LO
Lonna
2 months ago
But what about D) Beyond budgeting? It promotes flexibility, right?
GE
Georgiann
2 months ago
Agreed! Incremental budgeting doesn't challenge previous budgets.
DA
Danilo
2 months ago
I think it's A) Incremental budgeting. It allows slack to carry over.
FR
Francis
3 months ago
I’m not so sure, maybe they should consider zero-based budgeting instead.
SH
Shawna
3 months ago
Yup, definitely incremental budgeting. No challenge to the status quo!
LA
Laurene
3 months ago
Wait, are they really not catching that slack? Seems hard to believe.
AD
Adelina
3 months ago
Totally agree, it’s a classic case of just rolling over old budgets.
FE
Felix
3 months ago
Sounds like incremental budgeting to me.
IL
Iluminada
3 months ago
I’m a bit confused; I thought beyond budgeting was about flexibility, but maybe it’s not the right fit here?
PR
Precious
4 months ago
Zero-based budgeting sounds like it would prevent slack because every budget starts from scratch, right?
PA
Pansy
4 months ago
I remember practicing a question about budgetary slack, and it seemed like incremental budgeting was the main culprit.
LE
Letha
4 months ago
I think this might be incremental budgeting since it allows for carrying over previous budgets, but I'm not entirely sure.