Question

Not all budgets are equally subject to choice. Do you think that some spending items are more uncontrollable than others? Can you name a few?

Answer 1

Yes, all budgets are do not have same option of choice. As far as the production and administration budgets are concerned, they are totally controllable because those are bound by norms and budgets. All costs or spending under the production and administration are controllable.

But the budget related to the Selling and distribution expenses are not controllable because it is concerned with the selling and revenue of the organisation, which is the bread and butter of the organisation. Any loss of revenue due to controlling the expenses on the selling and distribution of company's products or services will count directly to the profits of the company. So, the expenses do not have any limit as long as it is bringing the revenues for the organisation. These expenses are advertisement and publicity expenses of the selling and distribution department and the other expenses are travelling and promotional, which do not have any kind of control because higher the sales, more expenses of travelling and promotional to boost the company's sales.

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