Though the method of setting an advertising budget is simple to use and management think about the relationships among promotion spending, selling price, and profit per unit, it wrongly views sales as the cause of promotion rather than the result.

Percentage-of-Sales

Explanation:

According to my research on different marketing techniques and tools, I can say that based on the information provided within the question the method being mentioned is called the Percentage-of-Sales method. Like mentioned in the question this is an approach that focuses on assuming that the balance sheet and income statement accounts will change drastically with sales. Since this is completely based on sales it allows a company to think about the relationships among promotion spending, selling price, and profit per unit when creating an advertising/marketing budget.

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