Final answer:
The statement is false as managers may introduce budgetary slack to ensure they can meet performance targets, which could include overestimating costs or underestimating sales. Similar behaviors are observed in broader economic contexts, such as consumer reactions to increased taxes on specific items leading to changes in spending patterns.
Step-by-step explanation:
The statement, FALSE: When the operating budget is used as a control device managers are less likely to be motivated to budget higher sales than actually anticipated, is generally considered to be false. When managers know that the budget will be used as a measure of performance, they might be tempted to manipulate figures by overestimating costs or underestimating sales to ensure that they can meet or exceed the budget, a behavior known as budgetary slack. This enables them to achieve performance targets more easily and avoid potential negative repercussions from failing to meet budgeted figures.
Examples of similar economic behaviors can be found outside of corporate budgeting, such as when governments impose taxes on products like alcohol. Such taxes usually result in a higher price, thus shifting the budget constraint and leading to reduced consumption of taxed products. However, the broader economic impact is that consumers might also reduce spending on other items, such as snacks at restaurants, demonstrating that the effects of budget constraints extend beyond immediate targets.