a) What is the difference between top down and build up budgeting approaches?

(4 marks)

b) Explain the percentage of sales budgeting method. In your explanation, highlight the alternative methods of calculating percentage of sales.

(6 marks)

c) Using the information provided below, estimate the IMC budget for Fresh Farms Eggs using each of the percentage of sales calculation methods discussed in (b) above.

Total dollar sales: $10,000,000.00

Cost per unit to manufacturer: $500

Unit cost allocated to advertising: $100.00

Forecasted sales: 1,000,000

Percentage allocated to IMC: 13%