Question

Errors in the sales forecast can be offset by similar errors in costs and income forecasts. Thus, as long as the errors are not large, sales forecast accuracy is not critical to the firm. Correct or Incorrect?

Answer 1

Answer: False

Explanation:

The above analysis is false. Sales forecast is when future sales are being estimated. It is very important for the sales forecast to be correct and accurate because it is used by the organization to make decisions and also predict the performances.

It is actually possible for the errors in the sales forecast to be offset by similar errors in costs and income forecasts but the accuracy of the sales forecast matters a lot.