Why Is Setting the Sales Budget Very Important

question 98

Multiple Choice

Why is setting the sales budget very important?

• A)The rest of the master budget is driven by the sales budget.
• B)It is based on the production targets set by the production department.
• C)It establishes the actual profits that will be earned by a company.
• D)None of the answer choices are correct.

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Definitions:

Premium Rate

The cost of an insurance policy per unit of coverage, reflecting the likelihood of a claim being made.

Coinsurance Clause

A provision in insurance policies that requires the policyholder to bear a portion of the costs of a claim, with the insurance company paying the remainder.

Coinsurance Clause

A provision in an insurance policy that defines the percentage of the claim amount to be shared between the insurer and the insured.

Short-rate Refund

A return of a portion of the premium on an insurance policy that is canceled by the policyholder before its expiration, calculated at less than a pro-rata basis.