In the context of the methods used to set an advertising budget, identify a true statement about the percentage of sales or profits method?
1) The percentage of sales or profits method is based on a fixed percentage of the company's total sales or profits.
2) The percentage of sales or profits method is not commonly used in advertising budgeting.
3) The percentage of sales or profits method is only applicable to small businesses.
4) The percentage of sales or profits method is calculated by dividing the advertising budget by the company's total sales or profits.