Mr. Holden had not expected that the firm report a loss for the month of January. He wondered if the first month’s results were bad in terms of the budgeted results for the year. While he knew that sales had been down because of the normal seasonal downturn, and that production had been scaled back to help reduce the level of inventory, he was still surprised. He was concerned that such a poor start to the year might make it difficult to reach the sales that was budgeted 10% higher than previous year.