Question

One of the most important tools in cost planning is

Answer 1

One of the most important tools in cost planning is

A. Direct cost

B. Cost sheet

C. Budget

D. Marginal costing

The correct answer is :

C. Budget

Explanation :

Budget is the most important tools in cost planning.

Budget is the process through which a balance between expenditure and income is established. Budget is the accounting of income and expenditure. It plays an important role in cost planning. The plan of cost planning can be implemented by making a suitable and correct budget.

A budget is a plan made for the future, which is made by estimating income and expenditure for a specified time period to establish a balance between them, so that there is no more expenditure than income and the action plan is completed in the available funds or resources.

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Answer 2

One of the most important tools in cost planning is Budget

Explanation:

• The most important tools in cost planning is Budget
• Budget is where the expenditure and the income is created and established.
• It is purely dealing with income and expenditure.
• Here the cost planning is done keeping in mind the the source of income and under what part it is going to be spend.
• Cost planning can be materialized and monitored with the help of  correct budget.
• In future what is planned to be spend is estimated.
• It is a written document of the income source and expenditure.
• There can be multiple fund with which a budget can be planned.
• Proper planning helps to know the future plans ,available funds and resources.
• It is planned for a specified time.

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