The Causal Method of Forecasting Uses Historical Data on Independent

question 26

True/False

The causal method of forecasting uses historical data on independent variables (such as promotional campaigns and economic conditions) to predict the demand of dependent variables (such as sales volume).

---

Definitions:

Activity Rate

The predetermined rate used to allocate overhead costs to cost objects based on activities.

Activity-Based Costing

An accounting method that assigns costs to products or services based on the activities required to produce each product or service, aiming for more precise cost allocation.

Overhead Cost

All indirect costs associated with the operation of a business, including administrative expenses, depreciation, and utilities.

Activity-Based Costing

A costing methodology that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption.