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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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A budget too easily achieved will lead to diminished performance. Do you agree? Explain.

To determine

Explain whether or not, a budget that can be achieved too easily will lead to diminished performance.

Explanation

Budgets:

Budgets are expected outcomes which are prepared to compare with actual outcomes to find the reasons for the variances and making decision subsequently. Budgets are prepared for the controlling purposes.

Budgets should be realistic to encourage enthusiasm and compliance. Budgets that are too hard or too easy reduce the performance of the employees...

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