When Forecasting Income Statements, Which of the Following Is Generally

question 15

Multiple Choice

When forecasting income statements, which of the following is generally a key assumption firms make about their variable operating costs?

• A)Variable operating costs remain the same each year.
• B)Variable operating costs increase at the same rate as sales.
• C)Variable operating costs are forecast to be the average of the operating costs during the previous three years.
• D)Variable operating costs decrease when sales increase.
• E)Variable operating costs are set at industry averages.

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Definitions:

Basal Metabolic Rate

The number of calories required to keep your body functioning at rest, often used in nutritional and fitness planning.

Blood Pressure

The force of circulating blood on the walls of the arteries, vital for transporting oxygen and nutrients to tissues and organs.

Stored Energy

Energy held in a system or object, often in the form of potential, chemical, nuclear, or kinetic energy, ready to be converted to other forms.

Set Point

The theory that each person's body weight is regulated by an internal control mechanism that strives to maintain a certain level of fat and muscle.