ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The sales budget should always be prepared first. The sales budget is an important component of the budgeting process and it indicates the forecast of units that will be sold in the period as well as the revenue to be earned from these sales.

Detailed explanation-2: -This time period is usually monthly, quarterly, or annual. Anything shorter or longer is generally either not useful or inaccurate. The period you choose will depend on what your business sells and needs. If your products are consistent year-round, then a monthly budget might be best.

Detailed explanation-3: -Sales Budget–The first step in the budget process involves preparation of sales forecastsand development of the sales budget. This budget is prepared first because other budgets cannot beprepared without an estimate of sales. Numerous methods may be used to estimate sales.

Detailed explanation-4: -Always remember that the sales budget is prepared first before any budget is created. Accordingly, after the sales budget, the production and cash budget then follows.