The Primary Appeal of the Percentage of Sales Method of Allocating

question 50

Multiple Choice

The primary appeal of the percentage of sales method of allocating an advertising budget is its:

• A)popularity
• B)accounting good sense
• C)control feature
• D)simplicity
• E)accuracy

---

Definitions:

Merchandise Inventory

Products that a company holds in stock with the intent to sell as part of its business operations.

Cost of Goods Sold

Costs incurred directly from the production of goods a company markets, including both materials and workforce expenses.

Days' Sales

A financial ratio that measures the average number of days a company takes to convert its inventory into sales.

Inventory Turnover

A financial metric measuring the rate at which a company sells and replaces its stock of goods during a particular period.