Which budgets are typically included in the master budget?

Which budgets are typically included in the master budget?

• A. Sales, production, materials, labour, overhead, cash.
• B. Only cash and sales.
• C. Marketing and R&D.
• D. Financial statements only.

Answer: (A)

The master budget brings together both the operating plans and the financial plan for the period. It starts from operating budgets that translate forecast sales into the resources needed: the sales budget sets expected revenue; the production budget determines how much to manufacture; budgets for materials, labour, and overhead estimate the input costs. The cash budget then shows expected cash receipts and payments to manage liquidity and financing needs. Including Sales, Production, Materials, Labour, Overhead, and Cash covers the main building blocks of the master budget. Other options miss essential components, such as omitting some operating budgets or the cash/financial planning. Marketing and R&D aren’t typically listed as separate master-budget components in this framework, and financial statements are outputs rather than standalone budgets.

The master budget brings together both the operating plans and the financial plan for the period. It starts from operating budgets that translate forecast sales into the resources needed: the sales budget sets expected revenue; the production budget determines how much to manufacture; budgets for materials, labour, and overhead estimate the input costs. The cash budget then shows expected cash receipts and payments to manage liquidity and financing needs. Including Sales, Production, Materials, Labour, Overhead, and Cash covers the main building blocks of the master budget. Other options miss essential components, such as omitting some operating budgets or the cash/financial planning. Marketing and R&D aren’t typically listed as separate master-budget components in this framework, and financial statements are outputs rather than standalone budgets.