Managers use budgets to help the organization to learn and adapt plans in response to changed circumstances rather than to evaluate performance.

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While budgets can be used to evaluate performance, their primary purpose is to aid in planning and decision-making. Budgets provide a framework for managers to allocate resources and monitor progress towards goals, and can help the organization adjust plans in response to changes in the business environment. Evaluation of performance is typically done through other methods, such as variance analysis or performance metrics.

Managers Use Budgets to Help the Organization to Learn and Adapt