In budgeting for each expense category, a sales manager should attempt to
A) set the budget at the lowest possible level.
B) determine the lowest expenditure level necessary to achieve the sales quotas.
C) cut costs from last year's level of expenditure.
D) justify the highest possible level of expenditure in order to have some flexibility in the budget.
E) improve profitability in the short run by cutting unnecessary expenditures for training and travel.

Question

Quizplus · Accepted Answer

A sales manager should set the budget at the lowest possible level necessary to achieve the sales quotas, as this ensures that expenses are kept to a minimum while still achieving desired results. Cutting costs from last year's level of expenditure and justifying the highest possible level of expenditure are not necessarily effective budgeting strategies, as they ignore the specific needs and goals of the organization. Improving profitability in the short run by cutting necessary expenditures for training and travel may have negative long-term effects on the company's performance.

In Budgeting for Each Expense Category, a Sales Manager Should