Question

Which of the following regarding Self Imposed Budgets is FALSE? A. Self-imposed budgets should be more reliable because front line workers are more familiar with the process. B. Self-imposed budgets can make employees feel valuable. C. One downside of self-imposed budgets is that goals can be too hard to attain because of unrealistic expectations. D. Lower-level management may not understand the overall organizational goals.

Answer 1

Answer: C. One downside of self-imposed budgets is that goals can be too hard to attain because of unrealistic expectations.

Explanation: Imposed budgeting is a top-down process where executives adhere to a goal that they set for the company. Managers follow the goals and impose budget targets for activities and costs.

A self-imposed budget or is one where each person with responsibility for cost control prepares his or her own budget estimates and submits them to the next higher level of management. This process empowers the managers to create their own self-imposed budgets.