One of the assumptions made in forecasting financial requirements based on the forecasted income statement is that:
A) costs in the next year will remain the same as the previous year.
B) costs will increase at the same rate as sales.
C) costs in the next year will be an average of the costs of the three previous years.
D) costs will move in the opposite direction of sales.
E) costs will be according to the industry standards.

Question

Quizplus · Accepted Answer

The assumption made in forecasting financial requirements based on the forecasted income statement is that costs will increase at the same rate as sales. This assumption is based on the belief that as sales increase, so will the costs associated with producing and selling the product or service. Therefore, it is important to forecast future sales accurately and use this as a basis for predicting future costs.

One of the Assumptions Made in Forecasting Financial Requirements Based