QUESTION 32

1. For each of the items below, identify whether the statement is a benefit of budgeting, a behavioral effect of budgeting, or neither.

   1) Enables scenario planning and sensitivity analysis 2) Building budget slack into budgets (create a built-in cushion) 3) Provides a benchmark for evaluating performance 4) Provides motivation for employees to work towards organizational objectives 5) Cutting prices in order to meet sales goals for the period 6) Tunnel vision (working to meet a budget but ignoring the big picture) 7) Public investors are able to better assess the company performance 8) Use-it-or-lose-it (managers spend money unnecessarily to try to keep it in the next budget) 9) Helps identify problems before they arise 10) Promotes cooperation and coordination between functional areas of the organization