Budget Definition Describe its uses
An estimate of expected sales for the budget period. Predicts and analyzes necessary amounts of products/services that will potentially be sold, thus ending in a positive net income/revenue
A projection of the units that must be produced to meet anticipated sales. Predicts and analyzes the amount of products/services that have sold in previous time periods and helps to know what the demand is for each unit, or what units/products may need to be cut from inventory
Direct materials budget
An estimate of the quantity and cost of direct materials to be purchased. Analyzes what is in current inventory and predicts what is needed to be ordered along with the cost of the product thus ending in the total amount of units and total cost of material/product needed for production
Direct labor budget
A projection of the quantity and cost of direct labor to be incurred to meet production requirements. This budget predicts the amount of hours and amount of funds needing to be spent by the company to employ workers to produce the product/services for the company
Manufacturing overhead budget
An estimate of expected manufacturing overhead costs for the budget period. This budget combines the regular monthly bills, such as space rent and electric bills, combined with the fluctuating costs of total number of hours of employees to be paid for their production hours and the cost of paying the employees as a company whole.
Selling and administrative expense budget
A projection of anticipated selling and administrative expenses for the budget period.
Budgeted income statement
An estimate of the expected
profitability of operations for the budget period. Predicts how much a company will actually gain in revenue based on all the operation budgets combined.
A projection of anticipated cash flows. Predicts how much cash will actually flow into a company as well as out of a company...