Identify the Correct Statement About the Percent of Sales Method

question 33

Multiple Choice

Identify the correct statement about the percent of sales method of determining advertising budget.

• A)It is characterized by a set of complex calculations that lack simplicity.
• B)It is based on the premise that advertising is needed to generate sales.
• C)It attempts to determine retail prices by using production costs as a base.
• D)It is most suitable for automobiles and appliances owing to its complicated framework.

---

Definitions:

Sales Increase

The rise in the volume or value of sales of goods and services over a specific period.

Fixed Assets

Long-term tangible assets that are used in the operations of a business and are not expected to be converted into cash in the near term.

Inventory

The totality of goods or materials a company holds for the purpose of selling in the market or using in production.

Fixed Assets

Assets that are of a permanent or long-term nature, typically used in the operations of a business, such as buildings, machinery, and equipment.