What is the difference between master budget and flexible?
Different purposes are satisfied by the budget.Different types of budgets are used.The budget can be grouped.The time budget.The budget is short or long.2.The budget is functional.
The functions of an organization are associated with the Functional Budget.Sales, production, labor, cost, overhead, capital and cash budgets are examples.
The first budget is an estimate of expected sales.It is the center of the organization.The sales budget is the starting point for budgeting.The budget is prepared by the sales manager.The procedure of the sales budget is the same.
I.There is data for past sales.Past sales figures are used to calculate the sales budget.The last few years have seen ups and downs in the Sale values.
(ii).The budget for production.The sales budget is used to calculate the production budget.The problem of how much to produce to meet the budget sales arises after the sales quantity and values are determined.The production budget is an estimate of the amount of goods that need to be produced.When preparing a production budget, the sales forecast, stock of closing stock and opening stock, plant capacity, purchase of other related part are taken into account.
The production cost budget shows the estimated cost of carrying out the production plans.It shows the cost of various elements of production cost such as material, labor, and overheads.The cost can be expressed in terms of a product or a department.
Purchase budget is concerned with purchases.The purchase of raw materials, fixed assets, services like electricity and gas are referred to.The main goal of the purchase budget is to come up with a plan which will allow all purchases at a minimum cost.
The labor requirements to meet the demand of the company are laid out in the labor cost budget.Direct and Indirect labor costs are the focus of the labor cost budget.The Personnel Department is responsible for selection, training and promotion.
This budget shows the forecast of production overheads during the budget period.There are three types of factory overheads: fixed, variable and semi-variable.The level of equality likely to be achieved was considered while preparing the budget.
The budget shows the plans for Capital expenditure, improvement of old assets and replacement of fixed assets.New building, land, and plants are possible.
Cash budget is the cash requirements of the business during the budget period.During the budget period, it compares the estimated Cash Receipts and Cash payments of the company.When required, sufficient cash is available.
All functional budget is combined into one unit.A summary plan of overall proposed operations is developed by management for the company.It is a summary budget with functional budgets which are finally approved, adopted and employed.The details of the sales budget, production budget and cash budget are contained in this budgeting.If approved by the budget committee, it will be submitted to the board of directors.It becomes the company's target once it is accepted and approved.