MAM Ltd. used to be the top dog in the market with 75% share. The company follows the policy of selling goods in cash only and set the target of achieving goal of selling rice at 30% profit. In 2018, other companies started selling rice on credit, which was different from what did (selling only for cash) before. But MAM's managers stuck to their old plans that had always worked before. Unfortunately, the world was changing, and these plans didn't fit anymore. This caused MAM's sales to go down. The story teaches us that sometimes sticking too much to old ways and not adapting to changes in the world can cause problems in business.

'MAM Ltd. compared the actual results with the planned ones'.

What is described in the above statement?

Budget

The correct answer is option 3- budget.

A budget is a statement of expected results expressed in numerical terms. It is a plan which quantifies future facts and figures. For example, a sales budget may forecast the sales of different products in each area for a particular month. A budget may also be prepared to show the number of workers required in the factory at peak production times. Since budget represents all items in numbers, it becomes easier to compare actual figures with expected figures and take corrective action subsequently. Thus, a budget is also a control device from which deviations can be taken care of.