Which of the Following Is NOT One of the Steps

question 28

Multiple Choice

Which of the following is NOT one of the steps taken in the financial planning process?

• A)Forecast financial statements and use these projections to analyze the likely effects of the operating plan on profits and various financial ratios.
• B)Forecast the funds that will be needed to support the 5-year plan.
• C)Develop a cash budget for use in determining when funds will be needed or when surplus funds will be available for investment.
• D)Consult with key competitors about the optimal set of prices to charge, i.e., the prices that will maximize profits for our firm and its competitors.

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Definitions:

Conversion Cost

Costs incurred during the transformation of raw materials into finished goods, specifically focusing on direct labor and manufacturing overhead expenses.

Direct Materials

Direct materials refer to the raw materials and components that are directly used in the manufacturing of a product, often considered a variable cost.

Period Costs

Expenses that are not directly tied to the production process and are expensed in the period they are incurred, such as selling, general, and administrative costs.

Operating Costs

Expenses related to the operation of a business, excluding costs associated with producing goods directly.