COST ACCOUNTING
THE MASTER BUDGET
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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It is a process of making of the budget that allocates funds according to the efficiency and need for to achieve the objectives of the organization instead of considering the budget history of years previous.
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It is basically an estimate of a company’s future costs, expenses and revenues for planning its operations.
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is an economic estimate that helps to forecast and project the future of the company and to establish the administrative process to be followed in order to obtain the expected profits
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Detailed explanation-1: -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: -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-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 the aggregation of all lower-level budgets produced by a company’s various functional areas, and also includes budgeted financial statements, cash forecast, and a financing plan.
Detailed explanation-5: -A master budget is a total budget composed of budgets from various departments in a company to help determine a company’s financial direction for a period of time. It is composed of three categories: operating budgets, financial budgets, and capital expenditures budgets.