consider the following activities and circumstances and discuss whether use of a bud 644615

(Management control systems) In many organizations, the operating budget is the primary control tool. The use of a budget to control activities is more appropriate in some circumstances than in others, and always a key criterion in evaluating the efficacy of a control is whether that control is helping to implement the firm’s strategy. Consider the following activities and circumstances, and discuss whether use of a bud get as a primary control is appropriate:

a. research and development department of a mature manufacturing firm

b. marketing expense of a start up technology company

c. travel expense for the sales force of an insurance company

d. energy costs for a public utility company

e. costs of environmental remediation for a chemical manufacturer

f. production costs in a car manufacturing company

g. operational costs of classroom buildings in a public university