Question

If a firm determines it can use the percentage-of-sales method and it follows the procedure described in the textbook, then the net result is that each expense item on its income statement (with the exception of those items that can be individually forecast) will grow at the same rate as sales. This approach is called the ________.

Answer 1

Constant ratio method of forecasting

Step-by-step explanation:

correct answer is Constant ratio method of forecasting because The fixed ratio method of forecasting refers to an appraisal process using the percentage-of-sales method, in which the cost on the company's income statement is expected to increase with the sale of goods