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from OpenJewition. com Chapter 3 is a relatively short chapter on budgeting and we begin by setting out other employer that you've sat back and tried to forecast, try to make some sort of realistic predictions about what's going to happen in the future and out of itself is extremely useful. Based on forecasts you can then plan. Do you want to extend your production capacity? Do you want to plan to open in another country? What exactly do you want to do in the forthcoming period? Communication. The budgets are written down and they are distributed to various key planners and what they are supposed to be achieving in the period. Time in front of you. An activity-based budgeting. This is basically on dial a manager saying variances, certainly adverse variances are important. We'll be going down the operating statements saying where expenditure is too high and ask the subordinate why have you gone over that. And the subordinate might say well so your production in units is sales plus what you want in closing stock less what you already have in your opening stock. So this here, road repairs, how much you can spend on waste collection, how much you can spend on