ECONOMICS

Detailed explanation-1: -Master budget A master budget is an aggregation of lower-level budgets created by the different functional areas in an organization. It uses inputs from financial statements, the cash forecast, and the financial plan. Management teams use master budgets to plan the activities they need to achieve their business goals.

Detailed explanation-2: -Direct Material Budget: Determines the quantity of direct raw materials that must be purchased each period to meet anticipated production needs (from the production budget) and to provide for adequate levels of direct raw materials inventories. Remember that raw materials inventory may also include indirect materials.

Detailed explanation-3: -The three types of budgets are a surplus budget, a balanced budget, and a deficit budget. The state budget is a financial document including income and expenditure for the year. An income-and expense-based spending plan is referred to as a budget.

Detailed explanation-4: -Zero-based budgeting (ZBB) is a budgeting technique in which all expenses must be justified for a new period or year starting from zero, versus starting with the previous budget and adjusting it as needed.