Budgets that Go into Creating a Master Budget

Part of the Managerial Accounting For Dummies Cheat Sheet

A master budget is a plan created to manage a company's manufacturing and sales activity to meet profit and cash flow goals. Creating a master budget requires careful coordination of several smaller budgets covering all parts of the organization; that way, the master budget is realistic but not complacent.

The master budget contains the following elements:

  • Sales budget

  • Production budget

  • Direct materials budget

  • Direct labor budget

  • Manufacturing overhead budget

  • Selling and administrative budget

  • Capital acquisitions budget

  • Cash budget

  • Budgeted financial statements

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Managerial Accounting For Dummies Cheat Sheet

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