One of the Weakest Methods to Budget for Advertising or Promotion

question 77

True/False

One of the weakest methods to budget for advertising or promotion is the percent of revenue.

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Definitions:

FIFO

First-In, First-Out, an inventory valuation method where goods or materials purchased first are the first to be sold or used.

LIFO

"Last In, First Out," an inventory valuation method where the last items added to inventory are considered sold first.

Retail Inventory Method

An accounting method used by retailers to estimate their ending inventory balances by applying a cost-to-retail price ratio to the retail value of the inventory.

Cost-to-retail Ratio

A method used to estimate the value of ending inventory based on the ratio of the cost of goods available for sale to the retail price of those goods.