When creating the sales budget, management simply takes the sales from the year before and divides that total by 12 months. Thus, each month will always predict the same amount of budgeted sales.

Question

Quizplus · Accepted Answer

Simply dividing last year's sales by 12 months does not take into account any changes in the market or other external factors that may affect sales. A more thorough analysis and forecasting process should be used to create an accurate sales budget.

When Creating the Sales Budget, Management Simply Takes the Sales