Business Studies Multiple Choice Question – 23 May 2021

PolyPlac, an international supplier of plastics, has to prepare yearly budgets. It uses historical-based budgeting to calculate its sales and production budgets.

Historical-based budgeting is MOST Likely to be?

Select ONE answer:

1. prepared from scratch
2. planned more carefully
3. more accurate
4. quick to prepare

Show the workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Business Studies KS4 & KS5 classes

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – Definition of historical-based budgeting e.g. a budget based on figures from previous years.  PolyPlac will use their current sales and production budgets as a basis for the new budget.  This method of budgeting is therefore very easy to produce as it does not entail any complex calculations.

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