Paper Topic:

Budgets

1

Name

Unit name

Unit code

Date

1 ) Master budget

A master budget is the overall collection of budget relating to the various operation of the firm . It can also be described as a summary of company 's plans that set specific target of sales , distribution production and financing activities . The major input to the master budget includes the budgeted balance sheet , budgeted income statement budgeted cash flow statement and the production budget which comprises of material , labor and overheads . Budgeted income statement shows the expected income

generated by an organization as a result of adopting specific strategies . Budgeted balance sheet is used to show the financial position of the organization at a future date . The budgeted cash flow statement is used to show the cash inflows and outflow and the need of external financing where necessary . The production overhead indicates the final output expected and the financing requirement in production unit

Benefits and purposes of a master budget

Integrate and coordinate - the master budget helps to coordinate and integrate the activities of different functional area within the firm It ensures that all the resources required will be at the right place at the right time . It also ensures that the product mix produced by manufacturing department is the same with which the marketing intend to sell

2

Communicate and motivate - it act as a communication device through which staff in each area understand how their effort contribute to the overall goal of the firm and this boost their morale...

3 pages

87.5 KB

Free sing-up