One statement about budgeting that is generally true is:

1) Manufacturing companies spend more time on budgets than do service companies.

2) Service company budgets tend to change only if there is a major increase or decrease in sales levels from year to year.

3) The budget process is an element of a companys activities and should be used throughout the year to evaluate performance.

4) The budget process is useful to assure shareholders that their interests will be looked after.