ECONOMICS

Detailed explanation-1: -The master budget has two major categories: the financial budget and the operating budget. The financial budget plans the use of assets and liabilities and results in a projected balance sheet. The operating budget helps plan future revenue and expenses and results in a projected income statement.

Detailed explanation-2: -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-3: -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-4: -The master budget is also known as the static budget and planning budget. It is called the static budget because it determines both the cost per unit and the expected number of units to be produced and sold.