ECONOMICS

Detailed explanation-1: -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.

Detailed explanation-2: -The budgets that roll up into the master budget include: Direct labor budget. Direct materials budget. Ending finished goods budget.

Detailed explanation-3: -What is the direct labor budget, and how is it prepared? Answer: The direct labor budgetAn estimate of direct labor hours, and related cost, necessary to achieve a desired level of production. is an estimate of direct labor hours, and related costs, necessary to achieve a desired level of production.

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.