Using the percentage-of-sales method of budgeting,the ratio of advertising expenditures to sales from the previous year is multiplied by ________ to determine the new advertising budget.
A)the competition's sales
B)share of media
C)share of market
D)last year's sales
E)next year's sales forecast

Question

Quizplus · Accepted Answer

The percentage-of-sales method of budgeting calculates the new advertising budget by multiplying the ratio of advertising expenditures to sales from the previous year by the next year's sales forecast. This method assumes that the amount spent on advertising should be a consistent percentage of sales revenue.

Using the Percentage-Of-Sales Method of Budgeting,the Ratio of Advertising Expenditures