Errors in the Sales Forecast Can Be Offset by Similar

question 45

True/False

Errors in the sales forecast can be offset by similar errors in costs and income forecasts. Thus, as long as the errors are not large, sales forecast accuracy is not critical to the well-being of the firm.

Understand basic probability concepts including events, sample points, and sample space.

Distinguish between union, intersection, and complement of events.

Apply principles of probability to calculate union, intersection, and complement probabilities.

Understand and identify different types of events including mutually exclusive and independent events.

---

Definitions:

Fixed Costs

Costs that remain constant regardless of the level of production or output, such as rent, salaries, and loan repayments.

Maximum Amounts

The highest allowable or possible quantity or number in a given set of circumstances or regulations.

Variable Costs

Expenses that vary in relation to the amount of activity or production volume within a company.

Fixed Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.