Question

With the __________ budgeting approaches, funds allocated to advertising tend to increase when sales rise and decrease when sales decline

Answer 1

Answer:

With the ALL YOU CAN AFFORD and

PERCENTAGE OF SALES budgeting approaches, funds allocated to advertising tend to increase when sales rise and decrease when sales decline

Explanation:

With the "percentage of sales" method, the sales value of the preceding year is first taken and then the expected sales during the year in question are arrived at. Some percentage of the expected sales are consid­ered and this is known as the percentage of sales approach.

The "all you can afford" approach, a company spends as much on advertising as it can afford. It can spend for advertising as much as the funds permit. From the name itself, it is clear that the affordable amount set aside for advertising is known as affordable method.

Therefore under both approaches, funds allocated to advertising tend to increase when sales rise and decrease when sales decline

Answer 2

Answer:

The correct word for the blank space is: all-you-can-afford, percent of sales.

Explanation:

The all-you-can-afford budgeting technique implies having a company investing in everything the firm can pay for. It is normally used for start-ups with limited funds so they use it as much as they can to keep the business going. As the sales increase, the investments in different departments are increased as well such as production, logistics, or marketing so the company moves according to the demand of the product.

The percent of sales budgeting relies -as it names says- on the number of sales a company is capable of processing. All the organizations' expenditures and advertising will have a directly proportional relationship with the percentage of sales of the organization.