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Q. What would be the principal budget factor for a footwear retailers?
A. The cost item taking the largest share of total expenditure
B. The product line contributing the largest amount to sales revenue
C. The product line contributing the largest amount to business profit
D. The constraint that is expected to limit the retailer’s activities during the budget period.Hey! The answer is d but I’m confused why not A.? I am not understanding what they are trying to say in d option please explain by some example..
The definition of the principal budget factor is whatever it is that is limiting the total activity (which is why the answer is D).
I do explain this (with examples) in my free lectures – have you watched them?
(The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well).Whatever cost item is taking the largest share of expenditure is not limiting how many they decide to produce.
Yes I’m watching your lectures and thankyou for providing free lectures and also thankyou for clearing this doubt
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