Question

Why is a company's sales budget developed before the production budget? a : the company needs to find ways to sell as many units as it can maximally produce. b : the company only wants to produce as many units as it expects to sell. c : the sales budget is more important than the production budget, so it receives a larger portion of the company's financial reserves. d : the company's sales managers have more control over the company's finances than the production managers?

Answer 1

B

Step-by-step explanation:

the company only wants to produce as many units as it expects to sell.

The sales budget is first developed before the production budget because the sales budget can forecast earnings. What the sales budget does is to calculate the amount of income it will get from sales activities over the calculated time period. The production budget will then use this data from the company's sales budget to make calculations on the number of products the company would have to produce over the period of time.