Percentage of Sales Models Are Planning Models in Which the Sales

question 58

True/False

Percentage of sales models are planning models in which the sales forecasts are the driving variables and most other variables are proportional to sales.

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Definitions:

Variable Costing

An accounting method that only allocates variable costs to inventory, treating fixed costs as period expenses.

Contribution Margin

The amount by which the selling price of an item exceeds its variable costs, contributing towards covering fixed costs and generating profit.

Sales Personnel

Individuals in an organization responsible for selling products or services to customers, often including roles such as sales representatives, sales managers, and sales directors.

Sales Mix

The combination of different products or services that a company sells, affecting profitability depending on the margins of each item.