1. In a real world setting, how does our current productive capability (how much we can make or do a week, month, year etc. with our current fixed assets) and the capital expenditures budget tie in to sales forecasting?
>Suppose top management wants to increase sales 15% next year and the business is already running at close to maximum productive capacity?
>The same logic would apply to a factory packing canned vegetables or a hair salon that has 6 chairs and is mostly booked all month.
2. You could be asked: "How did you come up with these costs?" or "How and why do key costs change from this year to next year?" What would you consider to be key information to provide to a budget committee about budgeted costs (research, assumptions and methods)?
3. What would you consider to be key information to provide to a budget committee about cash flows and financing?