Why is budgeted performance better than past performance as a basis for judging actual results?

A.

Budgeted performance is better than past performance as a basis for judging current performance because the budget contains no hidden inefficiencies and can be founded on current rather than past economic conditions.

B. Budgeting performance is better than past performance because it increases the risk of managers that can understate their budgeted costs or overstate their budgeted revenues to create a budget target that is harder to achieve.

C. Budgeting performance is better than past performance because it provides protection against cost increases or if revenues exceed expectations due to unforeseen events.

D. Budgeting performance is better than past performance because relying on historical results for judging current performance always exposes managers to unnecessary budget cuts imposed by higher-level management.