Explain what would be the problem if you choose wrong costing method !

Budgeting is many of activities preformed to prepare a quantitative plan that used as a tool for decision making in future: Preparing estimates of future sales. Preparing estimates of future cash collection and payments. Summarizing these estimates into balance sheet and on income statement. There are both advantages and disadvantages of budgeting for oman Flour cost Company. The several advantages are elimination of and inefficiencies, cost control, identifying resource for profit and loss and helping to preparing financial accounting. First advantages is elimination of waste and inefficiencies of some materials that go into the production process (increase COGs) that lead to loss (lower profit). In addition, budgeting help the company to prepare statement of retained earnings and statement of cash flows. All these things give useful information for external users