ECONOMICS

Detailed explanation-1: -A master budget is a comprehensive financial planning document that includes all of the lower-level budgets, cash flow forecasts, budgeted financial statements, and financial plans of an organization. It’s usually developed by a firm’s budget committee and guided by the budget director.

Detailed explanation-2: -The major components of a master budget include income and expenses, overhead and production costs, and the monthly, annual, average and projection totals.

Detailed explanation-3: -The master budget has two major categories: the financial budget and the operating budget.

Detailed explanation-4: -What is a master budget? A master budget is a company’s central financial planning document. It typically covers a full fiscal year and includes “lower-level” budgets-like a sales budget and a labor budget-cash flow forecasts, financial statements, and a financial plan.

Detailed explanation-5: -There are three main components to a master budget. Operating budgets cover the general company expenses and income. Capital expenditure budget covers longer term asset and project costs. Financial budgets deal with cash flows and company financial data.