Accounting

Master Budget

Master Budget

Muster budget is a summary of a company’s plan that sets specific targets for sales, production, financial activities and that generally achieves in a cash budget, budgeted income statement and budgeted balance sheet. It is the aggregation of all lower-level budgets produced by a company’s various functional areas, and also includes budgeted financial statements, cash forecast, and a financing plan. It is normally presented in both a monthly or quarterly system, and generally covers a company’s whole fiscal year. It is the summary of the divisional budget. It is a continuous financial plan.

Contents of the master budget:  The main components of a master budget include income and expenses, and production costs, and the monthly, annual, and average totals. The major contents are as follows –

  • Sales budget,
  • Production budget,
  • Direct material budget,
  • Direct labor budget,
  • Factory overhead budget,
  • Variable costs of the production budget,
  • Operating expenses budget,
  • Cash receipt budgets,
  • Cash payment budget,
  • Cash budget,
  • The variable cost of goods of the sold budget,
  • Budgeted income statement,
  • Budgeted balance sheet.