Competitive Parity Budgeting Refers to

question 187

Multiple Choice

Competitive parity budgeting refers to

• A) matching a competitor's absolute level of spending or the proportion per point of market share.
• B) allocating funds to a promotion as a percentage of past or anticipated sales, in terms of either dollars or units sold.
• C) allocating funds to a promotion only after all other budget items are covered.
• D) determining a firm's promotion objectives, outlining the tasks to accomplish these objectives, and determining the advertising cost of performing these tasks.
• E) allocating funds to a promotion based on expected profits generated from it.

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Definitions:

Total Cost Method

An accounting approach that aggregates all costs related to the production of goods or services.

Cost-Plus Approach

A pricing tactic that involves setting a sales price by adding a predetermined margin to the cost of the product.

Administrative Expenses

Costs related to the general management and administration of a company, such as salaries of executive officers and costs of general services.

Normal Levels

Standard measurements or averages that are considered typical or expected within a specific context, such as production, performance, or inventory levels.