ECONOMICS

Detailed explanation-1: -Operating budgets are concerned with: c. the income-generating activities of a firm.

Detailed explanation-2: -(1) Operating budgets, which outline the income-generating activities of a firm (sales, production, and finished goods inventories). The outcome of the operating budgets is a pro forma (budgeted) income statement.

Detailed explanation-3: -Answer and Explanation: 1) The correct answer is (C) The customer service budget. An operating budget is made to showcase the activities that generate income, like sales and production and the operating expenses, like cost of goods sold and overhead.

Detailed explanation-4: -The operating budgets include the budgets for sales, manufacturing costs (materials, labor, and overhead) or merchandise purchases, selling expenses, and general and administrative expenses.

Detailed explanation-5: -In operating budget, budgeted income statement and its schedules are included. In financial budget, cash budget, capital budget, and budgeted balance sheet are included.