Steps in the Budgeting Process

question 88

Essay

Steps in the budgeting process
Listed below are eight operating budget estimates. In the space provided, list which of these estimates is typically made first, second, third, etc.
(a) ___ Operating expense budget
(b) ___ Budgeted income statement
(c) ___ Ending finished goods forecast
(d) ___ Production schedule (in units)
(e) ___ Manufacturing cost estimates
(f) ___ Cost of goods sold budget
(g) ___ Sales forecast
(h) ___ Manufacturing cost budget

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Definitions:

Budgeting

The process of creating a financial plan or forecast for a specific period, detailing expected revenues and expenditures.

Employee Salaries

Fixed payments made to employees for their services over a specified period, typically monthly or bi-monthly.

Budgeting

The process of creating a financial plan to manage revenue and expenses for a specific period, often key to strategic planning in businesses and personal finance management.

Activity Variance

The difference between the budgeted amount of an activity and the actual amount incurred.