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What is budgetary slack? What incentive do managers have to create budgetary slack?

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What is budgetary slack? What incentive do managers have to create budgetary slack?

Discuss the advantages and disadvantages of Job Order Costing. Be sure to include specific examples of the advantages/disadvantages that you discuss.

What approach should be used to calculate the breakeven point of a company that has many products?

How is the contribution margin per unit of limited resources computed?

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The solution discusses what is budgetary slack.

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Budgetary slack is when someone who is responsible for a budget either overestimate expenses or underestimate revenue in order to make the budget easy to obtain. Managers have an incentive to do this because they are oftentimes compensated based on their performance in terms of meeting the budget.

The advantages of Job Order Costing include having all information in terms of cost available to management for each job being completed. For example, a completed job record will include information such as ...

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