The Most COMMON Method of Budgeting for Marketing Expenses Is

question 266

Multiple Choice

The most COMMON method of budgeting for marketing expenses is to:

• A) match competitors' spending.
• B) allocate any funds not already allocated to other functions.
• C) allocate enough to completely eliminate the cost of lost customers.
• D) allocate for the job that needs to be done.
• E) allow a percentage of either past or forecasted sales.

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Definitions:

Flexible Budget

A budget that adjusts or flexes for changes in the volume of activity, providing a more useful tool for performance evaluation than a static budget.

Other Expenses

Costs that are not directly related to the production of goods or services, such as administrative and marketing expenses.

Planning Budget

A financial plan created to estimate a company’s revenue, expenses, and cash flow for a specific future period.

Refurbishing Materials

Materials used in the process of renovating or restoring products to a like-new condition.