ACCA PM · Chapter 10 · Question 5 of 9
Which of the following is a principle of the 'beyond budgeting' model?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Using relative performance targets, such as benchmarks against competitors, instead of fixed annual targets
Explanation
Beyond budgeting argues that fixed annual budgets cause dysfunctional behaviour. It favours relative, flexible targets, resources made available on demand, decentralised decision-making and frequent rolling forecasts separate from performance evaluation.
More Budgetary systems and types of budget MCQs
- Q7The original budget for 10,000 units included: variable costs $60,000; semi-variable costs $35,000 (of which $15,000 is fixed); and fixed…
- Q8A manager compares the latest forecast of the year's results with the annual target and takes corrective action before the year end to…
- Q9Hopwood identified three styles of using budget information to evaluate managers. Under which style is a manager judged mainly on the…
- Q1Which of the following is the main criticism of incremental budgeting?
- Q2Under zero-based budgeting, what is a decision package?