Budgets provide managers with quantitative standards against which to measure and compare resource consumption.

Question

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Budgets provide a quantitative framework for managers to set goals, allocate resources, and measure performance against established standards. By comparing actual resource consumption to budgeted amounts, managers can identify areas of efficiency and effectiveness, and take corrective action when necessary. Thus, budgets play a crucial role in the planning, control, and evaluation of organizational resources.

Budgets Provide Managers with Quantitative Standards Against Which to Measure