Percentage of projected future sales method

A variation of the percentage of sales method of advertising budget allocation in which projected future sales are use as the base instead of the current year sales. Here the sales are projected for the coming year based on the marketing manager’s estimates. One advantage of using future sales as abase is that the budget is not based on last year’ sales. As the market changes, management must factor the effect of these changes on sales into next year’s forecast rather than relying on past data. The resulting budget is more likely to reflect current conditions and the more appropriate.