In its second year of operation, Dean's Specialty Foods earned $1 million in sales revenues, with $100,000 in promotional expenses. Dean's is budgeting an additional $30,000 in expenditures for the coming year in anticipation of sales revenues rising to $1.3 million. The budget process used by Dean's is called the percentage-of-sales method.

Question

Quizplus · Accepted Answer

The percentage-of-sales method involves budgeting expenses based on a percentage of projected sales, which aligns with Dean's approach of increasing expenditures in proportion to anticipated sales growth.

In Its Second Year of Operation, Dean's Specialty Foods Earned