The criticism that the percentage-of-sales budgeting technique is not logical is based on the idea that _____.
A) sales volume cannot be estimated accurately
B) it results in excessive amounts of funding being invested in advertising
C) it confuses objectives with goals
D) it reverses the true functional relationship between advertising and sales
E) advertising effectiveness cannot be measured

Question

The criticism that the percentage-of-sales budgeting technique is not logical is based on the idea that _____.
A) sales volume cannot be estimated accurately 
B) it results in excessive amounts of funding being invested in advertising 
C) it confuses objectives with goals 
D) it reverses the true functional relationship between advertising and sales 
E) advertising effectiveness cannot be measured

Quizplus · Accepted Answer

The percentage-of-sales budgeting technique is criticized for reversing the true functional relationship between advertising and sales. This technique assumes that advertising only affects sales and not the other way around, which is not always true. It also does not consider the impact of external factors such as competition and market trends.

The Criticism That the Percentage-Of-Sales Budgeting Technique Is Not Logical