In terms of profitability,investing in advertising can be justified only if the incremental revenue generated from the advertising effort exceeds the increase in the _____.
A) production expense
B) operational expense
C) discretionary expense
D) advertising expense
E) committed expense

Question

In terms of profitability,investing in advertising can be justified only if the incremental revenue generated from the advertising effort exceeds the increase in the _____.
A) production expense 
B) operational expense 
C) discretionary expense 
D) advertising expense 
E) committed expense

Quizplus · Accepted Answer

The question is asking which expense must be surpassed by the incremental revenue generated in order for investing in advertising to be profitable. The only expense mentioned in the answer choices that is directly related to advertising is the advertising expense itself (option D). Therefore, investing in advertising is justified only if the increase in revenue generated from the advertising effort exceeds the increase in advertising expense.

In Terms of Profitability,investing in Advertising Can Be Justified Only