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Answer A:
At least three advantages and three disadvantages of budgetary slack from the point of view of Artech Corporation's management group as a whole include the following.
Advantages:
 It provides flexibility for operating under unknown circumstances, such as an extra margin for discretionary expenses in case budget assumptions on inflation are incorrect or adverse circumstances arise.
 Additional slack may be included to offset the costly setups from design changes and/or small lot size orders.
 The increased pressure to meet current year earnings per share targets may result in postponing expenditures into the next year or aggressively pulling sales into the current year. Budgetary slack in the next year may compensate for shifting those earnings from next year into the current year.
Disadvantages:
 It decreases the ability to highlight weaknesses and take timely corrective actions on problem areas.
 It decreases the overall effectiveness of corporate planning. Actions such as pricing changes or reduced promotional spending may be taken from a perceived need to improve earnings when eliminating the budgetary slack could accomplish the same objective without marketplace changes.
 It limits the objective evaluation of departmental managers and performance of subordinates by using budgetary information.
Answer B:
Zero-based budgeting (ZBB) could be advantageous to Artech Corporation’s overall budget process for the following reasons:
 The ZBB process evaluates all proposed operating and administrative expenses as if they were being initiated for the first time. Each expenditure is justified, ranked, and prioritized according to its order of importance to the overall corporation, not just its role in one department.
 The focus is on evaluation of all activities rather than just incremental changes from the prior year. This allows addressing activities which have been ongoing to determine if they are still useful in the current environment. The objectives, operations, and costs of all activities are evaluated, and alternative means of accomplishing the objectives are more likely to be identified.