Which of the Following Is the Recommended Approach to Forecast

question 4

Multiple Choice

Which of the following is the recommended approach to forecast COGS,and why?

• A)Forecast COGS based on revenue growth,since it provides flexibility in the model.
• B)Forecasting COGS based on the forecast ratio of COGS to sales allows for possible improvements in COGS relative to sales.
• C)Forecast COGS based on revenue growth since COGS and revenues have a direct relationship.
• D)Forecasting COGS based on inventory is recommended because inventory prices and COGS are correlated.

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Definitions:

Depth Perception

The ability to perceive the distance of an object and the three-dimensional characteristics of an environment.

Similarity

A measure of how closely two or more distinct objects, ideas, or concepts resemble each other in appearance, function, or properties.

Common Region

A principle of perceptual organization where elements located within the same bounded space are perceived as being grouped together.

Closure

The psychological phenomenon of seeking a sense of resolution or completeness in perceptual or cognitive processes.