Working with Budgets Assignment Example | Topics and Well Written Essays - 250 words - 1

Working with Budgets - Assignment Example For an organization to perform to its best, it therefore must have well prepared budgets that will facilitate all the plans. The initial budget in an organization is the master budget, which encompasses all the other budgets. The master budget gives all the revenues and expenses that are expected for the period in time. This is followed by the revenue budget, which is considered to be the sales budget. The sales budget explains the forecasted sales and how they are to be achieved (Dugdale and Lyne, 2010). The proceeds are therefore considered to be the revenue of the organization. Therefore, the sales budget is considered to be the primary budget, as it is an input to the organization. The organization has to succinctly prepare budgets that are directed towards the expenditure of the organization. An organization that does not have a plan for such budgets is likely to plunge into a negative accrual. The first budget in the expenditure side is the operational and administration budget. This is a budget that caters for the workers and personnel in the organization. Since they are vital in the organization, they have to be prioritized (Drury, 2007). This is followed by manufacturing and overheads budget. This is a budget that denotes the materials that are to be used in the organization for production. The third budget is the labor budget, which is directed to the workers. Labor is a vital factor of production and should be given much consideration. The fourth budget is considered to be the production budget. This denotes the expenses that will be used during the production of the goods and services. This is vital in that it initiates the final production of goods. T he last budget is the supply and distribution budget. This is the final budget that shows the goods are ready for the market. The goods are therefore supplied in the market for sale, which is the initial forecast of an