It Is Time to Develop a Budget for Marketing Department

question 105

Multiple Choice

It is time to develop a budget for marketing department activities for the next year. Your team is looking over the following costs.: Office rent
Sales commissions
Promotional budget
Product development costs
Office supplies
The finance department has recently told you that you have $3,000 to spend on office supplies. You cannot go beyond this no matter what changes happen in the marketing department. Your salespeople get a flat 15% sales commission on anything they sell. With this in mind, which of these costs are variable costs?

• A)Office rent, sales commissions, promotional budget, product development costs, office supplies
• B)Office rent, promotional budget, and office supplies
• C)Sales commissions, promotional budget, and product development costs
• D)Sales commissions, product development costs, office supplies
• E)Promotional budget and office supplies

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Definitions:

Private Good

A product or service that is consumed by a single individual or household and cannot be used or consumed by others simultaneously.

Pizza

A popular Italian dish consisting of a usually round, flat base of leavened wheat-based dough topped with tomatoes, cheese, and often various other ingredients, which is then baked at a high temperature.

Nonexcludable Good

A type of good for which it is difficult or impossible to exclude individuals from using, typically leading to free-rider problems.

National Defense

National defense encompasses the measures and strategies implemented by a country to protect its sovereignty, territory, and populations from external threats or military aggression.