Which method of promotion budgeting would most likely

Which method of promotion budgeting would most likely be used by small businesses?
a. percentage of sales budgeting
b. competitive parity budgeting
c. all-you-can-afford
d. objective and task budgeting
e. relative scale budgeting
Answer: c Page: 486
Rationale: Common to many small businesses is all-you-can-afford budgeting in which
money is allocated to promotion only after all other budget items are covered.
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18-143 ALL-YOU-CAN-AFFORD BUDGETING APPLICATION
Imagine a small retailer saying, "Well, after budgeting for all of our expenses for next year,
we still have about $7500 remaining for emergencies. How about if we budget 20 percent of
that amount for advertising?" What budgeting technique is the small retailer using?
18-144 OBJECTIVE AND TASK BUDGETING DEFINITION
Objective and task budgeting is a budgeting method:
a. that allocates funds to promotion as a percentage of past or anticipated sales, in terms of
either dollars or units sold.
b. that matches the competitor's absolute level of spending or the proportion per point of
market share.
c. that allocates funds to promotion only after all other budget items are covered.
d. whereby the company determines its promotion objectives, outlines the tasks to
accomplish these objectives, and determines the promotion cost of performing these tasks.
e. that allocates funds to promotion based on the greatest percentage of possible available
revenue.
Answer: d Page: 486-487 Other Locations: SG
Rationale: Key term definition—objective and task budgeting
18-145 OBJECTIVE AND TASK BUDGETING DEFINITION
The best approach to promotion budgeting is _____ budgeting method whereby the company
determines its promotion objectives, outlines the tasks to accomplish these objectives, and
determines the promotion cost of performing these tasks.

18-146 OBJECTIVE AND TASK BUDGETING DEFINITION
The best approach to budgeting is objective and task budgeting, whereby the company
determines its promotion objectives, outlines the tasks to accomplish those objectives, and:
a. asks the ad agency for an estimate.
b. asks the media to propose a program.
c. determines the promotion cost of performing those tasks.
d. determines what spending level top management will allow for the proposed program.
e. surveys customers to determine what spending levels they think appropriate.