Budgets might be set accordingg to the following issues:
1. Company Objectives- What are your spending priorities for the forthcoming year?
2. Competitor Spending- Attempting to match your budgets to those of rival businesses
3. Last year's allocation- Looking at what was allocated last year and simply adding a percentage on to account for inflation
4. As a percentage of sales revenue- Deciding upon how much money to allocate depending upon the value of previous sales
5. Zero-based budgeting- Starting at zero and having to justify every penny that they require. This is used to control spending and improve efficiency
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