When Projecting Operating Expenses,it Is Important to Determine the Mix

question 3

Multiple Choice

When projecting operating expenses,it is important to determine the mix of fixed and variable costs; one clue suggesting the presence of fixed costs is:

• A) the percentage change in cost of goods sold in prior years is significantly greater than the percentage change in sales.
• B) the percentage change in cost of goods sold in prior years is significantly less than the percentage change in sales.
• C) low capital intensity in the production process.
• D) the percentage change in sales in prior years is significantly greater than the percentage change in receivables.

---

Definitions:

Historical Managerial Performance

An assessment of past achievements and effectiveness of managers in their professional roles, often used for future planning and development.

Graphical Techniques

Various methods of using graphs, charts, and other visuals to analyze data, present information, or solve problems.

Intermediate Period

A timeframe between the short-term and long-term, often context-dependent, affecting planning and decision-making processes.

Production Days

Days designated for manufacturing or producing goods, factoring in work schedules, shifts, and operational capacity to meet demand.