In Terms of Money Spent on Developing an Advertising Campaign

question 186

Multiple Choice

In terms of money spent on developing an advertising campaign, a company should spend at least what percent of the money on buying media time or space?

• A)25
• B)40
• C)50
• D)75

---

Definitions:

Variable Costs

Expenses that change in proportion to the activity or volume of production, sales, or services rendered.

Fixed Costs

Charges that are unaffected by production or sales volume, for example, monthly rent or payroll expenses.

Selling Price

The price at which a product or service is offered to customers.

Contribution Margin Ratio

The percentage of sales revenue that exceeds variable costs, indicating the portion of sales available to cover fixed costs and generate profit.