What Is an Operating Budget?
Operating budget is the budget for daily production and operation activities during the planning and control budget period. The content of the operating budget can be divided into two parts: one is the budget that directly reflects the production and operation activities, including the sales budget, production budget, direct material budget, direct labor budget, manufacturing cost budget, product unit cost budget, sales and administrative management budget, etc. . The other part is a budget that reflects the financial status and financial results of the company's production and operation activities, including the estimated profit and loss statement, the estimated balance of funds, and cash budget. [1]
Operating budget
Right!
- Chinese name
- Operating budget
- Foreign name
- Operational Budget
- Meaning
- Budget for various activities that occur daily in the enterprise
- Including
- Sales budget, production budget
- Operating budget is the budget for daily production and operation activities during the planning and control budget period. The content of the operating budget can be divided into two parts: one is the budget that directly reflects the production and operation activities, including the sales budget, production budget, direct material budget, direct labor budget, manufacturing cost budget, product unit cost budget, sales and administrative management budget, etc. . The other part is a budget that reflects the financial status and financial results of the company's production and operation activities, including the estimated profit and loss statement, the estimated balance of funds, and cash budget. [1]
- The most basic and critical of the operating budget is the sales budget, which is a formal and detailed description of the sales forecast. Because sales forecasting is the basis of the plan, and the company mainly maintains operating expenses and profits by relying on the income from selling products and providing labor services, the sales budget becomes the basis of budget control.
- The production budget is prepared according to the estimated sales volume in the sales budget, and according to the product variety and quantity. After the production budget is compiled, it should also discharge the quarterly production schedule based on the estimated sales volume in each quarter and balance the production capacity, or the production plan outline. Based on the production budget and production schedule, Can prepare direct material procurement budget, direct labor budget and manufacturing cost budget. These three budgets constitute statistics of the production costs of the enterprise.
- The sales and management expense budget includes detailed items of various expenses that are expected to occur outside the scope of the manufacturing business, such as sales expenses, advertising expenses and transportation expenses. For enterprises that implement standard cost control, they also need to prepare a unit production cost budget.