1. What is participative budgeting? Discuss some of its advantages.

2. A budget too easily achieved will lead to diminished performance. Do you agree or disagree? Explain.

3. What is the role of top management in participative budgeting?

4. Explain why a manager has an incentive to build slack into the budget.

5. Explain how a manager can "milk the firm" to improve budgetary performance.

6. Identify performance measures other than budgets that can be used to discourage myopic behavior. Discuss how you would use these measures.

7. How important are the behavioral aspects of a budgetary control system? Explain.

8. In an era of budgetary cuts, across-the-board cuts harm good programs more than bad programs. Do you agree? What approach would you recommend? Why?

9. Explain how an activity-based budget is prepared.

10. What is the difference between an activity flexible budget and a functional-based (traditional) flexible budget?