Robin Jensen, manager of market planning for Viral Products of the IDP Pharmaceutical Co., is responsible for
Question:
to follow the theme of the ad currently appearing. The accompanying table summarizes the cost of the campaign:
The firms normal policy is to budget each year as a separate entity without carrying forward unspent monies. Jensen is requesting that, instead of just approving the budget for next year ( Year 1 above), the firm approve and budget the entire three- year project. This would allow her to move for-ward with her campaign and give her the freedom to apply any unspent funds in one year to the next year or to use them in another part of the campaign. She argues that the ad campaign is an integrated project stretching over three years and should be either approved or rejected in its entirety.
Required:
Critically evaluate Jensens request and make a recommendation as to whether a three- year budget should be approved per her proposal. (Assume that the advertising campaign is expected to be a profitableproject.)
Step by Step Answer:
Accounting for Decision Making and Control
ISBN: 978-0078025747
8th edition
Authors: Jerold Zimmerman