To reduce subjectivity in the budgeting process and gather as much information as possible,management often uses which of the following method(s)?
A)asking sales staff and/or market researchers for an estimate of the future period's sales.
B)using the Delphi technique and trend analysis.
C)entering past sales data into a regression model to obtain a statistical estimate of factors affecting sales (econometric model).
D)all of the above.

Question

Quizplus · Accepted Answer

To reduce subjectivity in the budgeting process and gather as much information as possible, management should use all of the above methods. By combining multiple methods such as asking sales staff and/or market researchers for an estimate of the future period's sales, using the Delphi technique and trend analysis, and entering past sales data into an econometric model, management can obtain a more accurate and reliable estimate of the budget. Using only one method may result in biased or incomplete information, leading to a less effective budgeting process.

To Reduce Subjectivity in the Budgeting Process and Gather as Much