One purpose of a company's budgeting system is to influence the behavior of managers.

Question

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A company's budgeting system is used to allocate resources and set goals, but it is also used to motivate managers to align their actions with the company's strategic plan and financial objectives. The budget provides a blueprint of expected outcomes, and managers are incentivized to make decisions and take actions that align with these expectations. Therefore, the budgeting system plays a significant role in shaping the behavior of managers.

One Purpose of a Company's Budgeting System Is to Influence