John Is Creating Next Year's Budget for PDC Corporation

question 116

Multiple Choice

John is creating next year's budget for PDC Corporation. He estimates that next year's sales volume will be 5% higher than this year and that the selling price per unit will remain at $75 per unit. He estimates that cost of goods sold will be $40 per unit, based on a purchase agreement the company has signed with its supplier. The company has done business with the supplier for many years. In creating the budget, which of the following tasks is most likely to be open-ended?

• A)Calculating budgeted sales volume
• B)Determining that sales volume will grow by 5%
• C)Calculating budgeted cost of goods sold
• D)Determining that cost of goods sold per unit will be $75 per unit

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Definitions:

Quantitative Measures

Metrics or data that can be expressed as numbers and statistically analyzed.

Large Sample

Refers to a significantly sizable set of data or respondents in statistical research, which enables more accurate and reliable analysis.

Brand Associations

The qualities, characteristics, and experiences customers connect with a brand in their minds.

Naturalistic

Pertaining to an approach or method that is based on natural conditions and inherent tendencies, often used in research or design thinking.