Question

Which of the following is not an advantage of budgeting? a.It forces managers to plan. b.It provides information for decision making. c.It guarantees an improvement in organizational efficiency. d.It provides a standard for performance evaluation. e.It improves communication and coordination.

Answer 1

Answer:

C) It guarantees an improvement in organizational efficiency.

Explanation:

A budget is simply an estimate that might serve as a guideline but by itself it cannot guarantee anything. That is why budget variances exist, both favorable and unfavorable. They are a useful tool to check the department's performance and efficiency, but even super efficient departments might not follow the budget (maybe they have a favorable variance which is good).

That is why the definition of a budget is simply an estimate or educated guess if you prefer.

Answer 2

Option c is not an advantage of budgeting.

The following information should be considered:

• Its advantage involved increase in the motivation of an employees, decision-making, coordination & communication improvement.
• option C is not correct as the manager might or might not be operate in effcient manner for accomplishing the target budget.

Therefore we can conclude that Option c is not an advantage of budgeting.

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