Which event would cause a change in the forecast for golf shop expenses?

Which event would cause a change in the forecast for golf shop expenses?

• A. Change in fashion trends
• B. New marketing campaign
• C. Staff retirement
• D. Increase in utility rates

Answer: (D)

An expense forecast for a golf shop is most sensitive to changes in ongoing operating costs. If utility rates increase, the shop will automatically face higher monthly bills for electricity, water, climate control, and related services. Those costs are a regular, recurring part of the budget, so the forecast must rise to accommodate the higher prices. Other events touch different parts of the budget—fashion trends mainly affect inventory purchases and cost of goods sold, a new marketing campaign changes marketing expenses but is a discretionary line item, and staff retirement would alter payroll only if positions are replaced and at what cost. The direct, ongoing impact on the shop’s day-to-day expenses comes from higher utility rates, making that option the best driver of a changed expense forecast.

An expense forecast for a golf shop is most sensitive to changes in ongoing operating costs. If utility rates increase, the shop will automatically face higher monthly bills for electricity, water, climate control, and related services. Those costs are a regular, recurring part of the budget, so the forecast must rise to accommodate the higher prices. Other events touch different parts of the budget—fashion trends mainly affect inventory purchases and cost of goods sold, a new marketing campaign changes marketing expenses but is a discretionary line item, and staff retirement would alter payroll only if positions are replaced and at what cost. The direct, ongoing impact on the shop’s day-to-day expenses comes from higher utility rates, making that option the best driver of a changed expense forecast.