On the proforma income statement, sales revenue for each product is based on its price multiplied by the lesser of either:

• The Your Sales Forecast entry (or, if none is entered, the Computer Prediction); or
• The total number of units available for sale (that is, the production schedule added to inventory).

When a forecast is less than the total number of units available for sale, the proforma income statement will display an inventory carrying cost. When a forecast is equal to or greater than the number of units available, which predicts every unit will be sold, the carrying cost will be zero.

Tip: The simulation charges a 12% inventory carrying cost.