When the Promotion Objective Is Focused Primarily on Producing a Short-Term

question 49

True/False

When the promotion objective is focused primarily on producing a short-term increase in sales,the marketing manager should evaluate the cost of the promotion relative to the extra sales expected.

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Definitions:

Flexible Budget

A budget designed to adapt in accordance with fluctuations in activity level or volume.

Contribution Margin

The amount by which sales revenue exceeds variable costs of a product, indicating how much contributes to covering fixed costs and generating profit.

Fixed Budget

A budget that is established at the beginning of a period and does not change, regardless of actual performance or outcomes.

Direct Labor Rate

The cost per hour for direct labor, which includes wages of workers who are directly involved in the production of goods.