Percentage of Sales Budgeting Refers to

question 174

Multiple Choice

Percentage of sales 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 only after all other budget items are covered.
• C) allocating funds to a promotion as a percentage of past or anticipated sales, in terms of either dollars or units sold.
• 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:

Substitution Effect

The change in demand for a good that results from a change in price, making the good more or less expensive relative to other goods.

Price Change

An alteration in the cost of a good or service, which can affect demand and supply dynamics in the market.

Substitution Effect

The change in consumption patterns due to a change in the prices of goods, leading consumers to replace more expensive items with cheaper alternatives.

Income Effect

The change in an individual's or economy's income and how that change will affect the quantity demanded of a good or service.