budgetary slack

This topic has 1 reply, 2 voices, and was last updated 5 years ago by John Moffat.

Viewing 2 posts - 1 through 2 (of 2 total)

Author
Posts
August 16, 2020 at 4:47 pm #580803
agnes222
Member
- Topics: 45
- Replies: 17
“a flexible budget will not be better or worse than a fixed budget in terms of including budgetary slack”.
Sir I was thinking that if a budgeted allowance for 10000units is $10000 ,say, then if a manager produces 8000units and ends up using all the allowance then under fixed budget he wont be scorned for poor performance. But under flexible budget he would obviously be accountable and answerable for mismanaging the allowance. So is not the budgetary slack being reduced in case of flexible budget?
August 17, 2020 at 8:10 am #580845
John Moffat
Keymaster
- Topics: 57
- Replies: 54846
The point is that if the original budget includes slack (so $1 per unit is more than it really should be), then even when it is flexed (and so for 8,000 units we would have $8,000) then this flexed amount will still include slack.
Author
Posts

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.