What Is Forecasting? How Do You Perform It? How Can

question 5

Essay

What is forecasting? How do you perform it? How can you test the potential validity of your forecasts? Explain.

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Definitions:

Variable Selling Expense

Expenses that vary with sales volume, including commissions and shipping charges.

Fixed Selling Expense

Costs associated with selling which remain constant regardless of the level of sales.

Variable Administrative Expense

Costs that vary with changes in the level of an organization's activity, related to administrative functions.

Contribution Margin

The revenue remaining after subtracting variable costs, which can then be used to cover fixed expenses and provide profit.