Understanding Business Budgets

What is the primary purpose of a budget in a business context?

• To increase employee salaries

• To expand the business globally

• To reduce the number of employees

• To set financial targets and make informed decisions

Which of the following is NOT a basis for preparing a sales budget?

• Historical data

• Market analysis

• Sales forecasts

• Employee satisfaction surveys

How does a sales budget help businesses?

• By setting unrealistic sales targets

• By evaluating sales performance and making necessary changes

• By increasing production costs

• By reducing marketing efforts

What is the main focus of a cost budget?

• Estimating and controlling business expenses

• Increasing sales revenue

• Expanding the product line

• Hiring more employees

What does a profit budget combine to determine projected profitability?

• Sales and marketing strategies

• Sales and cost budgets

• Employee performance and satisfaction

• Market trends and forecasts