Question

The budget relating to ________ must be prepared first and the other budgets should be prepared in the light of that factor.

• A. limiting factor
• B. materials
• C. labour
• D. production

Answer 1

Answer: (A)

limiting factor

The factors which will limit the activity of a business are called as limiting factor. This may be output, sales, shortage of raw material, shortage of labor etc. Hence budgets relating to limiting factors should be prepared first than other budgets must be planned.