In Which of the Following Budgeting Approaches Can the Previous

question 8

Multiple Choice

In which of the following budgeting approaches can the previous year's sales most strongly influence the current year's advertising budget?

• A) all-you-can-afford
• B) percentage of sales
• C) competitive parity
• D) zero-base budgeting
• E) none of the above

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Definitions:

Days' Sales in Inventory

A financial metric indicating the average number of days a company takes to sell its inventory.

Ending Inventory

The cumulative worth of merchandise ready for sale at the conclusion of a financial period.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including material and labor expenses.

Profit Margin Ratio

A financial metric that measures the percentage of profit a company earns from its total revenue.