Budgeted costs refer to the estimated expenses that a business or individual plans to incur over a specific period. These costs are typically based on historical data, market trends, and expected future activities. By setting budgeted costs, organizations can allocate resources effectively and monitor their financial performance. Tracking budgeted costs helps in identifying variances between planned and actual spending. This process allows for better financial control and decision-making. Adjustments can be made to stay within budget, ensuring that resources are used efficiently and financial goals are met.