A relevant cost is a cost that only relates to a specific management decision, and which will

change in the future as a result of that decision. The relevant cost concept is extremely

useful for eliminating extraneous information from a particular decision-making process.
The relevant cost concept is extremely useful for eliminating extraneous information from a
particular decision-making process. Also, by eliminating irrelevant costs from a decision,
management is prevented from focusing on information that might otherwise incorrectly
affect its decision.
Importance and usefulness: The notion of the relevant cost is very helpful to
eliminate irrelevant information from a particular decision-making process. Also, by
eliminating irrelevant costs from a decision, management is prevented from focusing on
information that might inaccurately affect its decision.

A budget is an estimation of revenue and expenses over a specified future

period of time and is usually compiled and re-evaluated on a periodic basis.
Budgets can be made for a person, a family, a group of people, a business, a
government, a country, a multinational organization or just about anything else
that makes and spends money. At companies and organizations, a budget is
an internal tool used by management and is often not required for reporting by
external parties.
The purpose of budgeting is basically to provide a model of how the business might
perform, financially speaking, if certain strategies, events, plans are carried out. In
constructing a Business Plan, the manager attempts to forecast Income and Expenditure,
and thereby profitability.
Budgetary control is a system of procedures used to ensure that an organization's actual
revenues and expenditures adhere closely to its financial plan.