One set of needed changes can be re

One set of needed changes can be related to Mr. Baum's three major complaints, as follows:• Complaint #1・”[W]e can't budget sales revenues very accurately, so all of the reportsshow large variances. But what do I do about them?”This suggests that, although the divisions are profit centers, Mr. Baum does not thinkthey have much control over revenue. Either they should be changed to standard expensescenters, or he must communicate to the DGMs that they are expected to work on achievingrevenue targets. If the DGMs cannot control the revenue of their divisions, who else can?Regardless of this, it would appear that there is a need for a flexible budget. This wouldhelp Mr. Baum determine whether his DGMs are doing a good job of controlling expenses for the actual volume and mix of sales that they had during any given month. Thiscertainly would be appropriate if the divisions were made into standard expense centers,but it also would be helpful information, both to the DGMs and to Mr. Baum, if the divisions remain as profit centers.