Multiple Choice
XDR Corp.is expecting a 10% increase in sales next year.XDR has an inventory balance of $1,000,000 and uses the percent of sales forecasting method.Which of the following could explain why the inventory forecast of $1,100,000 might be too high?
A) The current inventory balance of $1,000,000 is lower than usual because of a one-time end of year fire sale.
B) The company is going to change its depreciation method in the coming year.
C) The growth in sales could be as high as 15%.
D) A fixed amount of inventory is required to do business, so inventory doesn't increase proportionally with sales.
Correct Answer:
Verified
Correct Answer:
Verified
Q6: A budget is a forecast of future
Q39: Fielding Wilderness Outfitters had projected its sales
Q40: Which of the following would not be
Q42: The percent-of-sales method can be used to
Q43: Wilbur and Company reports sales of $20,000,000
Q51: A discretionary form of financing would be<br>A)
Q69: Use the "percent of sales method" of
Q75: The first step involved in predicting financing
Q110: The cash budget represents a detailed plan
Q127: When forecasting fixed asset requirements,the projected fixed