Which element in the projected income statement cannot be forecasted using the percentage-of-sales method?
A) Cost of goods sold
B) Selling expense
C) Administrative expense
D) Interest expense
E) All of these items can be forecasted using the percentage-of-sales method.

Question

Quizplus · Accepted Answer

Interest expense is not directly related to sales and cannot be reliably forecasted using the percentage-of-sales method. It is determined by factors such as the interest rate of loans and investments, and changes in the company's debt structure.

Which Element in the Projected Income Statement Cannot Be Forecasted