In its third year of operation, Kibber's Dog accessories earned $500K in sales revenues, with $100K in promotional expenses.Kibber's is budgeting an additional $50K in expenditures for the coming year in anticipation of sales revenues rising to $750K.Which of the following BEST describes the budgeting method used?

Question

Quizplus · Accepted Answer

The percentage-of-sales method is used in this scenario as the budget is based on a percentage of expected sales revenues. The company is budgeting an additional $50K, which is 6.67% of the expected sales of $750K, which is consistent with the percentage-of-sales method. The other options (A, C, and D) are not applicable in this scenario.

In Its Third Year of Operation, Kibber's Dog Accessories Earned