COST ACCOUNTING
INTRODUCTION TO COST ACCOUNTING
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
The revenue data is easiest to gather.
|
|
|
Sales information is precise in amount.
|
|
|
Sales personnel have the quickest access to data.
|
|
|
Sales personnel need to “be first” with everything.
|
|
|
Almost all activities of a firm emanate from sales efforts.
|
Detailed explanation-1: -A sales forecast is the first step in the budgeting process of a merchandising firm because: Almost all activities of a firm emanate from (i.e., are linked to) estimated sales demand.
Detailed explanation-2: -The sales forecast is forecasting the level of sales in the future. It involves taking into consideration all the factors which can affect the sales. It is usually the first step in the budgeting process. The production budget is the budget related to production.
Detailed explanation-3: -So, the first step in evaluating a sales forecast is to examine the assumptions on which it’s based. If the company finds that sales forecasts are significantly different from actual sales in the period, it should undertake a review of the sales forecasting process before making any more forecasts.
Detailed explanation-4: -Sales forecast is considered as the starting point for budgeting because it is the level of sales only which has a direct impact on every aspect of the business transactions. Sales activities would eventually determine the profits and the cost incurred in the production.