W4 Discussion

1. Flexible budgets are less rigid and are used by companies that incur a high percentage of variable expenses. Fixed and flexible budgets provide managers with a tool that helps them monitor financial results. The budgets are different and apply to different situations. In general, which budget option would you recommend from a grocery store employer? From an operational perspective why do you believe this is a good choice? 80 words – no quote

2. Budget slack is a common practice particularly when managers receive bonuses or incentives if actual revenue or profits exceed budget. In order to eliminate or minimize this type of behavior many organizations tie financial incentives to overall company performance, and if the cost mix includes a high percentage of variable expenses the company may use a flexible budget. What are negative or positive behavioral implications and how this may create budget slack at an employer of a grocery store? 80 words – no quotes