The major problem with the budgeting method is a reversal of the cause and effect relationship.
A) percentage of sales
B) competitive parity
C) objective and task method
D) rapidly diminishing returns

Question

Quizplus · Accepted Answer

The percentage of sales method bases the budget on a fixed percentage of past or forecasted sales, which reversely assumes sales drive advertising spend, rather than advertising efforts driving sales.

The Major Problem with the Budgeting Method Is a Reversal