The sales forecast directly affects many elements of the master budget.Which of the following would be least affected by short-term fluctuations in the sales forecasts?
A)The production schedule
B)The budgeted income statement
C)The capital expenditures budget
D)The operating expense budget

Question

Quizplus · Accepted Answer

Short-term fluctuations in sales forecasts are unlikely to affect the capital expenditures budget as it involves long-term investments in assets such as property, plant, and equipment, which are not directly tied to short-term fluctuations in sales. On the other hand, the production schedule, budgeted income statement, and operating expense budget are all closely tied to sales forecasts and are likely to be affected by short-term fluctuations in sales.

The Sales Forecast Directly Affects Many Elements of the Master