Question

When managers submit budget requests that include allowances for contingencies that are higher than what costs are really expected to be, the intent is to create budget ________ .

Answer 1

Managers create budget reserves by overestimating the required funds in the budget to account for unforeseen expenses.

Step-by-step explanation:

When managers submit budget requests that include allowances for contingencies that are higher than what costs are really expected to be, the intent is to create budget reserves. Budget reserves are set aside to account for any unexpected expenses or changes in the financial landscape. By overestimating the required funds in the budget, managers ensure that they have a safety net to address unforeseen circumstances.