Question

An early warning signal for the potential of an overdrawn budget is created when: contingency funds are applied for. a bottom-up budget never makes it up the chain of command. activity-based costing cannot identify drivers. a top-down process moves too quickly down to the functional managers.

Answer 1

It is created when contingency funds are applied for.
Contingency funs is a type of monetary fund that set aside for unforseen circumtances that the company may experience in the future. The usage of this fund indicates that the company could no longer follow the budget line that created for normal operation.