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Question 4 Which of the following statements is true? Select the correct answer from the options below Budgets can be too focused on costs Budgets do not focus primarily on sales Budgets focus on the management's ethnicity Budgets focus mostly on pricing 4 pts

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Question 4
Which of the following statements is true?
Select the correct answer from the options below
Budgets can be too focused on costs
Budgets do not focus primarily on sales
Budgets focus on the management's ethnicity
Budgets focus mostly on pricing
4 pts

Question 4 Which of the following statements is true? Select the correct answer from the options below Budgets can be too focused on costs Budgets do not focus primarily on sales Budgets focus on the management's ethnicity Budgets focus mostly on pricing 4 pts

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XavierElite · Tutor for 8 years

Answer

**Budgets can be too focused on costs** is the correct option and is true according to proper budgeting techniques and financial management system.

Explain

## Step 1: <br />Every given option must be evaluated based on common knowledge and understanding of budgeting and accounting principles.<br /> <br /> - Lookup: Budgeting is a financial plan designed to control the costs or the finances of an entity for the achievement of certain goals. The focus of a budget is to keep control on financial aspects (both income ie., sales, pricing and expenditure ie., cost) and not on any non-monetary factors like management ethnicity.<br /><br />## Step 2:<br />Evaluate all options<br /> <br />### Option 1: <br />Budgets can be too focused on costs<br /> - Analysis: True. Budgets can sometimes become too cost-centric, while overlooking the goal for which the costs are being controlled.<br /> <br />### Option 2:<br />Budgets do not focus primarily on sales<br /> - Analysis: False. A significant component of budgeting revolves around estimating and controlling sales. Sales estimates form the foundation on which budgets are prepared.<br /> <br />### Option 3:<br />Budgets focus on the management's ethnicity <br /> - Analysis: False. As previously stated, ethnicity has no relevance in the budgeting context.<br /><br />### Option 4:<br />Budgets focus mostly on pricing<br /> - Analysis: False. Though pricing is an important component of a budget, it is incorrect to say that budgets focus 'mostly' on pricing.<br /><br />## Step 3:<br />Select the most accurate statement based on analysis. Obviously budgeting demands more details surrounding expense and revenues along with all other related factors.<br /> <br />## Double-check:<br />Ensuring the validity of the statement (Option 1). This account of budgeting being overly focused on cost correlates with common budgeting comprehension, confirmed by exert knowledge on financing.
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