Budgeting

Question 1

What is a Budget ?

Answer 1

A Budget is a financial plan for the forthcoming year of business.

Question 2

Sales Budget

Answer 2

(forecasts the number of units to be SOLD)

The price of the product and the amount of sales revenue that is likely to gain.

Question 3

Production Budget

Answer 3

(forecasts the number of units to be PRODUCED)

The materials budget - cost of raw materials

Question 4

Staff Budget

Answer 4

(forecasts the required STAFF both direct and indirect)

Wage costs and number of staff

Question 5

Production Overhead Budget

Answer 5

This forecasts the FIXED OVERHEADS that the business will incur, linked to production.

Question 6

Admin Expenses Budget

Answer 6

Managerial salaries, office expenses, utility bills, and rent or mortgage payments

Question 7

Selling Expenses Budget

Answer 7

(These are costs associated with SELLING the products)

Advertising, sales promotions and distribution