Problem
A budget is a financial plan that managers use to coordinate a business's activities. Budgeting provides a plan for the company's future. The budgeting process coordinates a company's activities requiring managers at all levels to work together. Budgeting also provides a benchmark that helps managers evaluate performance.
A master budget is a set of budgeted financial statements and supporting schedules. Budgets contain budgeted information, not actual amounts. The master budget contains three types of budgets, operating, capital expenditures and financial budgets.
In your post,
1. Explain each of the operating budgets, sales, production, direct materials, direct labor, manufacturing overhead, cost of goods sold, and selling and administrative expenses.
2. Explain the capital expenditures and the financial budgets.