When Using the Competitive Parity Method to Budgeting, the Firm

question 90

Multiple Choice

When using the competitive parity method to budgeting, the firm:

• A)matches its percentage-of-sales expenditures with those of others in the market/industry.
• B)spends as much as it can.
• C)allocates some portion of planned sales for the period to advertising.
• D)spends the same total amount as its major competitors spend.
• E)bases its advertising and promotion expenditures on sales.

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Definitions:

Judgment Sample

A sampling technique where the samples are selected based on the judgment of the researcher, rather than random selection.

Random Sample

A subset of a statistical population in which each member has an equal chance of being chosen, used to make inferences about the whole population.

Correlation

A metric that shows how much two or more variables move in relation to each other.

Causation

The relationship between cause and effect, where one event is the result of the occurrence of another event.