Area of Operation Budget Classification

Classification according to Area of Operation

A. Functional Budgets:

The functional budgets are prepared for each function of the organization. These budgets are generally prepared for a period of one year and then broken down to each month. The following budgets are included in this category.

  • Sales Budget
  • Production Budget
  • Material Purchase Budget
  • Cash Budget
  • Direct Labor Budget
  • Factory Overhead Budget:

B. Master Budget:

  • Fixed Budgets
  • Flexible Budgets

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