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Suppose a Marketing Manager Was Conducting a Marketing Cost Analysis

Question 58

Multiple Choice

Suppose a marketing manager was conducting a marketing cost analysis.In doing so,he wanted to allocate activity costs to each of four unrelated product lines.What would be the most appropriate approach for allocating advertising expenses?


A) 25 percent of the cost of each ad should be allocated to each product line.
B) 25 percent of the total marketing budget should be allocated to each product line.
C) Assuming the product lines are advertised separately,the direct advertising expenses for each ad should be allocated to its respective product line.
D) Advertising expenses should be prorated on the basis of product line profitability such that the more profitable lines would assume a greater proportion of the advertising expenses than the less profitable lines.
E) Advertising expenses should be prorated on the basis of sales for each product line such that the lines with the greater sales volume would assume a greater proportion of the advertising expenses.

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