Using the Percentage-Of-Sales Method of Budgeting,the Ratio of Advertising Expenditures

question 22

Multiple Choice

Using the percentage-of-sales method of budgeting,the ratio of advertising expenditures to sales from the previous year is multiplied by ________ to determine the new advertising budget.

• A)the competition's sales
• B)share of media
• C)share of market
• D)last year's sales
• E)next year's sales forecast

---

Definitions:

Marginal Utility

The additional satisfaction or benefit gained from consuming one more unit of a good or service.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing their gained benefit.

Market Price

The current price at which a commodity, security, or service can be bought or sold in a particular market.

Willingness to Pay

The maximum amount an individual is prepared to spend for a particular good or service.