When Managers Predict That Sales for Next Year Will Be

question 17

Multiple Choice

When managers predict that sales for next year will be the same as last year,despite a weakening economy,they are

• A)using framing.
• B)using regression to the mean.
• C)using confirmation bias.
• D)ignoring the base rate.
• E)escalating commitment.

---

Definitions:

Budgeted Cash Disbursements

An estimate of all cash payments that a business plans to make over a specific period, including operating expenses, purchase of assets, and other payouts.

Variable Selling Expense

includes costs that vary directly with sales volume, such as commissions, shipping charges, and promotional expenses.

Direct Labor Wage Rate

The amount paid per hour or per unit of production to employees who directly manufacture or assemble products.

Raw Materials Cost

The total expense associated with the raw materials used in the production of goods or services.