MO Marketing Officer Budget & Financial Management 1 — Questions and Answers
Question 1: A marketing officer is allocating an annual budget across channels. Which budgeting method sets spending as a fixed percentage of projected revenue?
- Zero-based budgeting
- Percentage-of-sales budgeting (Correct answer)
- Competitive parity budgeting
- Objective-and-task budgeting
Correct answer: Percentage-of-sales budgeting
Percentage-of-sales budgeting ties marketing spend directly to a fixed percentage of anticipated or past revenue.
Question 2: Which budgeting approach requires every line item to be justified from scratch each budget cycle rather than using the prior year as a baseline?
- Incremental budgeting
- Rolling budget
- Zero-based budgeting (Correct answer)
- Top-down budgeting
Correct answer: Zero-based budgeting
Zero-based budgeting starts from zero and requires justification for every expense, regardless of prior-year spending.
Question 3: A marketing department spent $50,000 on a campaign that generated $200,000 in revenue. What is the Return on Marketing Investment (ROMI)?
- 150%
- 300% (Correct answer)
- 400%
- 250%
Correct answer: 300%
ROMI = (Revenue - Cost) / Cost × 100 = ($200,000 - $50,000) / $50,000 × 100 = 300%.
Question 4: Which document provides a month-by-month projection of marketing income and expenses over a fiscal year?
- Balance sheet
- Marketing budget forecast (Correct answer)
- Cash flow statement
- Profit and loss statement
Correct answer: Marketing budget forecast
A marketing budget forecast outlines anticipated spending and income month-by-month to guide resource planning throughout the year.
Question 5: A marketing officer wants to compare planned budget figures against actual spend in real time. Which tool or process best supports this?
- Post-campaign survey
- Budget variance analysis (Correct answer)
- Customer lifetime value model
- Competitive benchmarking
Correct answer: Budget variance analysis
Budget variance analysis compares planned versus actual expenditure, revealing overspending or underspending in real time.
Question 6: When a marketing officer must choose between two equally promising campaigns but has limited funds, which financial concept guides the decision?
- Sunk cost
- Opportunity cost (Correct answer)
- Variable cost
- Fixed cost
Correct answer: Opportunity cost
Opportunity cost represents the value of the foregone alternative, helping officers decide which investment yields the greatest benefit given resource constraints.
Question 7: Which type of cost remains constant regardless of campaign output volume, such as a retainer fee for an agency?
- Variable cost
- Marginal cost
- Sunk cost
- Fixed cost (Correct answer)
Correct answer: Fixed cost
Fixed costs do not change with the level of campaign activity or output, such as a monthly agency retainer.
MO Marketing Officer Budget & Financial Management 1
A marketing officer is allocating an annual budget across channels.
Which budgeting method sets spending as a fixed percentage of projected revenue?