Question

Identify at least three forecasted expenses that are directly or indirectly related to revenue.

Answer 1

Forecasted expenses that are directly or indirectly related to revenue

· Cost of goods sold – The cost of goods sold usually consists of variable expenses that vary directly with sales. The cost of goods sold includes manufacturing costs (direct material, direct labor and manufacturing overheads) and adjusted for finished goods inventory.

· Sales commission- Sales team in an organisation are usually offered incentives in the form of commission. Hence this expenses varies directly with sales

· Shipping charges- Shipping charges directly varies with sales in an organisation. They are carriage outward on sales made to customers.