Paper 1 · Business Planning
A business plan also serves as a control tool because it
Asets the salaries of the board of directors
Brecords every transaction the business makes
Clets actual results be compared with targets
Dfixes the prices charged for the next ten years
Explanation: The plan states what sales, costs and cash flow are expected in each period. When the actual figures come in, the difference between the two is a variance that tells management where performance is off course and where corrective action is needed.
Derived from ZIMSEC Business Enterprise Skills Paper 1, Nov 2018, Q5