Module+7000+X+Summary+and+Conclusions

=X. Module 7000 Summary and Conclusions ldm = = = = = = = **__Summary:__** = = The master budget is composed of the operating budgets and the financial budgets. In this module, the operating budgets were the main focus. The components of the operating budget are as follows: = = = = = = As you can see above, each of these budgets builds off of one another, and can be combined to create the budgeted income statement. The budgeted income statement is critical to a company because it provides an estimate of operating income.
 * 1) Sales budget – estimates sales for the company.
 * 2) Production budget – estimates units needed to meet sales goals.
 * 3) Direct materials purchases budget – estimates materials needed to meet production goals.
 * 4) Direct labor budget – estimates direct labor hours and direct labor cost needed to meet production goals.
 * 5) Overhead budget – estimates fixed and variable costs of overhead.
 * 6) Ending finished goods inventory budget – calculates unit cost which is needed to calculate cost of goods sold.
 * 7) Cost of goods sold budget – estimates the cost of selling the number of units forecast in the sales budget.
 * 8) Marketing expense budget – estimates costs of selling and distribution.
 * 9) Administrative expense budget – estimates overall expenses for the operation of the company.
 * 10) Research and development expense budget – estimates costs for research and development.