percentage of sales method
Definition 1
General: Method of estimating cash requirements by expressing revenues and expenses as percentages of sales, and using these percentages to construct a pro forma income statement.
Definition 2
Advertising: Advertising expense budgeting method based on allocating a fixed percentage (say 5 percent) of the anticipated sales revenue to advertising. It is based on the erroneous assumption that “sales cause advertising” whereas the reality is just the opposite (advertising causes sales). See also adaptive control method, affordable method, competitive parity method, and objectives and task method.
percentage of sales method is in the Accounting & Auditing and Advertising, Marketing, & Sales subjects.
percentage of sales method appears in the definitions of the following terms: adaptive control method, advertising appropriation methods, objectives and task method, affordable method and competitive parity method
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