Sam's Caf is a multi-national soup, salad and sandwich restaurant chain. It operates across 100 countries, and its major markets include the United States, Germany and Japan. Sam's Caf's restaurants are well-established and enjoy a good reputation, largely due to the high quality of their meals. The restaurants are all set in small towns, where there is limited competition and this enabled Sam's Caf to develop a strong and loyal client base. Sam's Caf believes that there is no such thing as "the American consumer." In every country where it runs its restaurants, the Food & Marketing departmental managers are given the freedom to modify the menus to appropriately suit local customer preferences. Menu items are also listed in order of local popularity and are translated into the local language. Sam's Caf has been consistently profitable. However, following the COVID-19 pandemic, since 2019, profit margins are quite low in the restaurant industry and Sam's Caf needs to constantly monitor its costs. Currently, its highest operating expenditure comprises of labor costs. Sam's Caf currently adopts an incremental approach to budgeting. However, a new finance director has recently joined the company and has questioned whether this budgeting method is suitable for all of Sam's Caf's restaurants.

a. Identify and briefly explain the type of management control being exercised within the Food & Marketing departments at Sam's Caf. [2 marks]

b. Explain what is meant by an incremental approach to budgeting. [2 marks]

c. Explain, using relevant examples, TWO (2) advantages and TWO (2) disadvantages of incremental budgeting for Sam's Caf. [8 marks]

d. Define a participative approach to budgeting and explain TWO (2) limitations of introducing this approach at Sam's Caf. [4 marks