ICAEW BIP · Chapter 6 · Question 10 of 11
A manager compares forecast results for the rest of the year with the budget and takes action now to correct an expected shortfall before it happens. This is an example of:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) feedforward control
Explanation
Feedforward control compares forecast results with targets so that action can be taken before deviations happen. Feedback control compares actual results with budget after the event and responds to variances. Feedforward control is proactive, but it relies on reliable forecasts.
More Budgeting: purposes and approaches MCQs
- Q1Which of the following is NOT normally a purpose of budgeting?
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- Q3What is the main weakness of incremental budgeting?
- Q4Which of the following best describes zero-based budgeting?
- Q5A company prepares a 12-month budget and, at the end of each quarter, adds a further quarter so that a 12-month budget always exists. What…