Which of the Following Observations Is Not Applicable to the Analogy

question 21

Multiple Choice

Which of the following observations is not applicable to the analogy approach of forecasting sales?

• A)It allows for comparison of similar available historical data for any particular product.
• B)It uses a behavioural approach to estimate future sales patterns and likely customers.
• C)It is an approach often used to forecast the sales or market potential for a new product.
• D)It allows managers to look at the sales history of earlier introductions to forecast the sales for the new product.

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Definitions:

Direct Materials

Raw materials that can be directly linked to the production of a specific product.

Fixed Overhead

Regular, ongoing expenses that are not affected by changes in production level or output, such as rent and insurance.

Variable Overhead

Costs that change in proportion to the level of production activity or volume, such as power for manufacturing equipment.

Direct Labor

The labor costs directly associated with the production of goods or services, which includes wages for workers who physically contribute to the finished product.