ACCA Applied Knowledge · Management Accounting · Behavioural aspects of budgeting
Which of the following targets is most likely to motivate a manager to achieve better performance, according to the behavioural view of budgeting?
A challenging target that the manager accepts as achievable is most motivating. It stretches performance without causing the frustration of an impossible target or the complacency of an easy one, and acceptance builds commitment.
- AA target equal to the worst performance in recent years
- BA target that is challenging but which the manager accepts as achievableCorrect
- CA target imposed without any discussion and set at an extremely high level
- DA target that is exactly the same as last year regardless of conditions
Explanation
Motivation is greatest when targets are demanding yet accepted as attainable, so the manager commits to them. Very easy targets lead to complacency, and imposed, extreme targets lead to rejection and demotivation.
Did you get it right without looking?
One question tells you little. A timed set on Behavioural aspects of budgeting shows your real accuracy, how long you take and where you lose marks.
More Behavioural aspects of budgeting questions
- A cost centre manager at Brindle Co has a controllable budget of $200,000 and actual controllable costs of $212,000. Allocated head office c…
- Which situation would make an imposed budgeting approach more appropriate than a participative one?
- A company's managers are invited to take part in preparing the budgets for their own departments, and their proposals are discussed with sen…
- A manager's budget for a department's costs is $480,000. Senior management later establishes that the costs could realistically be $432,000 …
- A budget is set at a level the manager believes is impossible to achieve. Which is the most likely behavioural consequence?
- Under a participative budgeting system, a manager expects to sell 10,000 units but submits a sales budget of 8,000 units so that the target …