Which of the Following Statements Is True Regarding Budgets

Multiple Choice

Which of the following statements is true regarding budgets?

A) Actual numbers should never be compared to budgets, since budgets are simply estimates.
B) Variances resulting from comparison of actual and budgeted amounts will always require management to take corrective action.
C) Management should set expectations high and unattainable so that employees will be motivated to reach the goals set.
D) Managers use variance analysis to compare actual outcomes to the budget to evaluate performance and solve issues that caused the variances.