Budgeting and behaviour. (CMA, adapted) Many managers claim that budgets are imprac- tical because companies experience so many uncertainties. However, it is very probable that a firm's competitors are using budgets as indispensable management tools. A major objective of budgeting is to substitute deliberate, well-conceived business judgment for accidental success or failure in enterprise management. Implicit in this objective is the confidence that a compe- tent management team can plan for, manage, and control in large measure the relevant variables that dominate the life of a business. Managers must grapple with uncertainties, regardless of whether they have a budget. REQUIRED 1. Describe at least three benefits, other than improved cost control, that an organization can expect to realize from the implementation of budgeting. 2. Because a reliable prediction of sales is critical to the planning process, describe at least two factors that should be considered when preparing sales forecasts.

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