John is creating next year's budget for PDC Ltd. He estimates that next year's sales volume will be 5% higher than this year and that the selling price per unit will remain at $75 per unit. He estimates that cost of goods sold will be $40 per unit, based on a purchase agreement the company has signed with its supplier. The company has done business with the supplier for many years. In creating the budget, which of the following tasks is most likely to be open-ended?
A) Calculating budgeted sales volume
B) Determining that sales volume will grow by 5%
C) Calculating budgeted cost of goods sold
D) Determining that cost of goods sold per unit will be $75 per unit

Question

Quizplus · Accepted Answer

Determining that sales volume will grow by 5% is open-ended because it involves forecasting future market conditions and consumer behavior, which can be uncertain and subject to change.

John Is Creating Next Year's Budget for PDC Ltd