Question

A manufacturing company is preparing its budgets for the coming year. Although demand for its product is high, production cannot exceed 15,000 units because of limited machine hours and shortage of skilled labour. While preparing the functional budgets, management first considers this constraint before finalising all other budgets. In budgeting terminology, this constraint is known as _______

A Fixed cost factor
B Common cost factor
C Key factor
D Controllable factor
E Standard cost factor
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