Use the information below to answer the following questions.
Saddle Company, a leather manufacturer, has a sales budget of $500,000 for February. The cost of sales is estimated to be 35% of sales. All materials purchased by Saddle Company are paid for in the month following the purchase. The beginning inventory for February is $10,000, and an ending inventory of $11,000 is desired. The trade payables balance at the beginning of February is $88,000.
-Projected statements compared with historical statements are:
A) more reliable.
B) more subjective.
C) more objective.
D) less relevant.

Question

Quizplus · Accepted Answer

Projected statements are based on estimates and assumptions about future events, making them more subjective compared to historical statements, which are based on actual events that have already occurred.

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