A major fallacy of ________ budgeting is that sales cause promotion. Using this method, a company may reduce the amount it spends on promotion if sales declined the previous period when it may actually need to spend more.

Question

Quizplus · Accepted Answer

Percentage of sales budgeting is based on the premise that promotion spending should be a fixed percentage of sales, which can lead to reduced promotion budgets when sales decline, even though increased promotion might be necessary to boost sales.

A Major Fallacy of ________ Budgeting Is That Sales Cause