ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Correct option is Cash budget Cash budget is the financial budget. Financial budget helps to estimate the cash flow and out flow of cash. So cash budget is not an operating budget. .…

Detailed explanation-2: -Accordingly, cash budget is not part of the operating budget.

Detailed explanation-3: -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 cash budget is prepared after the operating budgets (sales, manufacturing expenses or merchandise purchases, selling expenses, and general and administrative expenses) and the capital expenditures budget are prepared.

Detailed explanation-5: -Cash inflows and cash outflows are used to calculate the budget. Operating expenses are a part of the total cash outflow. Setup cost is incurred for starting the business and hence is excluded in the budget calculations. So Option C is the right answer.