Involvement–which implies full personal commitment to a project, and being accountable for its attainment–is an indispensable factor in effective budgeting. In others, the forecast is the end result of a detailed and exhaustive statistical examination, product by product and market by market, of the many factors which are likely to affect the business in the budget year. In every budget, the value of sales is an estimate, as are the costs relating to raw materials, purchases, wages, salaries and other fixed expenses. A suitable way of resolving the conflict between realism and idealism is to adopt a method of budgeting which incorporates both-the expected and the desired. If so, the savings are calculated for incorporation in the cost reduction programme, and the revised labour cost inserted in the budget. A good budget will provide management with a realistic statement against which actual performance can be measured.