CSM Sales Forecasting & Budgeting 3

Question 1

Which factor most commonly causes inaccurate sales forecasts?

Accepted Answer

Reps overestimating deal close probability due to optimism bias

Answer

Optimism bias leads reps to inflate close probabilities or expected close dates, causing forecasts to exceed actual results.

Question 2

A 'top-down' forecasting approach begins with:

Accepted Answer

An overall revenue target set by executive leadership that is then distributed to regions and reps

Answer

Top-down forecasting starts with a company-wide or market-level revenue goal established by leadership, which is then broken down into targets for regions, teams, and individuals.

Question 3

A zero-based budget in sales planning requires managers to:

Accepted Answer

Justify every expense from scratch each budget cycle rather than building from the prior year's baseline

Answer

Zero-based budgeting requires every line item to be justified anew each period, preventing automatic carryover of prior spending and encouraging cost scrutiny.

Question 4

In sales budget analysis, CAC stands for:

Accepted Answer

Customer Acquisition Cost

Answer

Customer Acquisition Cost measures the total sales and marketing spend required to acquire one new customer, a key metric for evaluating budget efficiency.

Question 5

What is the purpose of a contingency budget in sales planning?

Accepted Answer

To set aside funds for unexpected costs or opportunities that arise during the budget period

Answer

A contingency budget provides a financial reserve for unforeseen expenses or strategic opportunities, preventing disruption to core activities when surprises occur.

(CSM) Certified Sales Manager Practice Test

(CSM) Certified Sales Manager Practice Test

CSM Sales Forecasting & Budgeting 3