Why Is Setting the Sales Budget Very Important

question 98

Multiple Choice

Why is setting the sales budget very important?

• A)The rest of the master budget is driven by the sales budget.
• B)It is based on the production targets set by the production department.
• C)It establishes the actual profits that will be earned by a company.
• D)None of the answer choices are correct.

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Definitions:

Error Relative

A measure of the difference between an observed or calculated value and the true value, often expressed as a percentage.

Causal Forecasting Methods

Forecasting techniques that assume relationships between the item being forecasted and other variables, such as promotional campaigns or economic conditions, to predict future trends.

Environment Factors

External elements, such as regulatory, social, economic, and ecological conditions, that can influence a company's operations and strategic decisions.

Demand Forecast

The method of predicting the amount of a product or service that customers will buy in the future.