Q. Calculate Percentage of Sales Methods?
The sum to be appropriated to advertising is arrived at by multiplying the worth of past year's sales or projected sales for the budget period with a pre determined percentage.
Advertising budget amount = Past Year's Sales or Anticipated Sales x Pre-determined Percentage.
For Example: - If the sales are Rs: 300 billion and percentage decided by top management is 4 then advertiser will spend Rs: 12 billion (300x 4%) on advertisement. In this method two major decision are to be taken i) % whether to take past or future sale.