Debra Has Been Given the Responsibility of Determining the Advertising

question 45

Multiple Choice

Debra has been given the responsibility of determining the advertising appropriation for her firm's newest marketing campaign. At first she thinks that determining the advertising objectives and breaking them into tasks is the best way. However, Debra notices that past sales have been relatively constant, she multiplies the firm's past sales by a standard percentage based on what her firm usually spends on advertising. Debra is using the ________________ approach. The problem of this approach is that it assumes _________________________.

• A) objective-and-task; the effort required is minimal
• B) objective-and-task; advertising creates sales
• C) percent-of-sales; advertising creates sales
• D) objective-and-task; sales create advertising
• E) percent-of-sales; sales create advertising

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Definitions:

Variable Manufacturing Cost

Costs that fluctuate with the level of production output, such as raw materials and direct labor.

Fixed Manufacturing Cost

Overheads that do not change with the level of manufacturing output, including salaries of permanent staff and rent.

Annual Impact

The effect or influence that something has over the course of a year, often used in the context of financial, environmental, or social effects.

Net Operating Income

The total profit of a business after subtracting operating expenses but before deducting taxes and interest.