The _____ Method of Budgeting Is Being Employed When Expenditures

question 100

Multiple Choice

The _____ method of budgeting is being employed when expenditures are allocated by assigning a part of the cost of the product to be allocated to advertising.The total budget is based on units sold.

• A)arbitrary allocation
• B)percentage of sales
• C)objective and task
• D)return on investment
• E)competitive parity

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Definitions:

Prime Cost

The sum of direct materials cost and direct labor cost, representing the direct production costs.

Cost Structure

The composition of different types of costs within a company or specific project, often categorized into fixed and variable costs.

Contribution Margin

The amount of revenue remaining after deducting variable costs, which can then be used to cover fixed costs and contribute to profit.

Product Mix

The variety of products that a company produces or sells, considering the diversity in type, size, and quality.